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JPMorgan's quant guru says traders are waiting for tax cuts to unleash more stock market gains

The US stock market is not even close to pricing in the full positive effect of a successful GOP tax bill, says JPMorgan quant guru Marko Kolanovic. The firm has a 2018 year-end price target of 3,000 for the S&P 500, which ties it with Oppenheimer as the most bullish on Wall Street. JPMorgan also forecasts that volatility will rebound from near-record levels next year, and it sees tail risks mounting in the second half. Despite already sitting close to record levels, US stocks are a sleeping giant, waiting to be awakened so they can unleash more gains upon the market. So says JPMorgan quant guru Marko Kolanovic, who predicts that a successful GOP tax bill will give equities a huge shot in the arm in 2018. In his mind, the institutional investors that control a huge chunk of the market are still in wait-and-see mode when it comes to tax reform, patiently biding time before putting more capital to work. "The upcoming reduction of US corporate tax rates may be one of the biggest positive catalysts for US equities this cycle," Kolanovic, who serves as JPMorgan's global head of quantitative and derivatives strategy, wrote in a client note. "We think that little is priced into the market and hence there is potential for market upside. Clients are not repositioning portfolios until they see the reform passed." This optimism around the effect of tax reform on US stocks informs JPMorgan's 2018 year-end S&P 500 forecast of 3,000. The estimate ties the firm with Oppenheimer as the most bullish on Wall Street, and it marks a 13% gain from Thursday's closing level. The importance of tax reform to that call can be seen in the breakdown of JPMorgan's earnings growth forecast for next year. The firm projects that half of earnings upside — or roughly $10 per share for the S&P 500 will be due to a successful GOP tax bill. An uptick in volatility JPMorgan also forecasts that price swings in the US stock market will pick up in 2018 after almost a full year locked near the lowest levels ever. The CBOE Volatility Index — or VIX — has been at an average of 11 in 2017, about 10 points below its historical norm. The firm expects the measure of stock market fear to climb into the 13 to 14 range next year, with price swings beginning in earnest during the second half. JPMorgan also sees record low intra-stock correlations increasing in 2018, which could add to volatility. After all, when equities are moving independently of one another, they're more likely to offset each others' moves, leading to minimal shifts in broad indexes. "Like a frog being boiled" That uptick in volatility in the second half of 2018 will correspond directly to a higher likelihood of tail risk derailing the market, says JPMorgan. Out of all potential headwinds, the firm fears the reduction of central bank monetary accommodation most of all. With the Federal Reserve set to start unwinding its massive balance sheet, JPMorgan thinks that could have an adverse impact on risk premia across asset classes, levels of leverage and valuations. "However, asset classes may not react immediately, and like a 'frog being boiled' tail risks may be realized with a significant delay and triggered by an unrelated catalyst," wrote Kolanovic. In terms of how that tail risk might manifest itself, JPMorgan sees three possibilities: forced deleveraging of systematic strategies, disruptions to market liquidity and failure of bonds to offset equity risk. As such, while the firm is still bullish on US stocks as a whole, it recommends that investors start hedging in the second quarter. Now that JPMorgan has weighed in, here's a round-up of the other 2018 year-end S&P 500 targets on Wall Street, ordered from most to least bullish: Oppenheimer — John Stoltzfus — Target: 3,000 Bank of Montreal — Brian Belski — Target: 2,950 UBS — Keith Parker — Target: 2,900 Credit Suisse — Jonathan Golub — Target: 2,875 Jefferies — Sean Darby — Target: 2,855 Deutsche Bank — Binky Chadha — Target: 2,850 Goldman Sachs — David Kostin — Target: 2,850 Bank of America — Savita Subramanian — Target: 2,800 Canaccord — Tony Dwyer — Target: 2,800 Morgan Stanley — Mike Wilson — Target: 2,750 Scotiabank — Vincent Delisle — Target, 2,750 Stifel Nicolaus — Barry Bannister — Target: 2,750 Citigroup — Tobias Levkovich — Target: 2,675 HSBC — Ben Laidler — Target: 2,650 SEE ALSO: The mysterious trader known as '50 Cent' has lost $197 million betting on a stock market meltdown Join the conversation about this story » NOW WATCH: One type of ETF is taking over the market

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10 things you need to know before the opening bell (SPY, SPX, QQQ, DIA, ORCL, JPM, DIX, FOXA)

Here is what you need to know. The FCC repeals net neutrality. The Federal Communications Commission voted 3 to 2 in favor of repealing net neutrality, which paves the way for broadband providers to sell different tiers of internet service but which critics say will leave consumers and web startups at the mercy of the big telecommunications companies. JPMorgan sets its S&P 500 target for 2018. The JPMorgan quant guru Marko Kolanovic set his year-end 2018 target for the S&P 500 at 3,000 — as long as Republicans pass their tax overhaul. Russia surprises with a bigger rate cut. The Central Bank of Russia cut its benchmark interest rate by 50 basis points to 7.75% (8% expected), noting a slowdown in inflation. Bitcoin hits a new high. The red-hot cryptocurrency hit a record high $17,933 a coin on Friday, according to data from Markets Insider. It's up 1,644% this year. Ripple's XRP becomes the 3rd-largest cryptocurrency. XRP, which aims to use blockchain technology to speed up cross-border money transfers and bank settlements, became the third-largest cryptocurrency by market cap on Thursday as its total value hit $32.029 billion. Disney is buying 21st Century Fox's studio and TV assets. The entertainment giant agreed to pay $52.4 billion for Fox's 39% stake in Sky, Star India, a collection of pay-TV channels like FX and National Geographic, as well as popular entertainment brands like X-Men, Avatar, and the Simpsons. Oracle beats, but its stock sinks. The database giant beat on both the top and bottom lines, but its shares fell by more than 4% in after-hours trading on Thursday as its adjusted earnings-per-share forecast for the third quarter missed Wall Street estimates. Spotify's valuation swells. The streaming-music service has seen its valuation swell 20% over the past few months to $19 billion as it readies to file for an initial public offering, sources familiar with the matter told Reuters. Stock markets around the world are mostly lower. Hong Kong's Hang Seng (-1.09%) trailed in Asia, and France's CAC (-0.27%) lags in Europe. The S&P 500 is set to open higher by 0.21% near 2,657. US economic data flows. Empire Manufacturing will be released at 8:30 a.m. ET before industrial production and capacity utilization cross the wires at 9:15 a.m. ET. The US 10-year yield is up 1 basis point at 2.36%.Join the conversation about this story »

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'The fight isnt over': Tech erupts after the FCC's vote to kill net neutrality

The FCC voted to repeal net neutrality on Thursday morning and tech companies and executives spoke out in disappointment, and expressed desires to appeal the decision in court. The tech community has been pro-net neutrality since the plan to repeal was announced. Tech execs from Sheryl Sandberg to Microsoft's Brad Smith spoke out on Thursday to decry the FCC's controversial vote killing net neutrality.  The move by the FCC eliminates rules that stop broadband providers like Comcast and Verizon from charging customers more for access to certain sites, blocking or slowing down competitors content, and charging for internet "fast lanes." Pro-net neutrality groups argue that the rules are necessary to ensure a level internet playing field. And many of the big internet companies wasted no time in speaking out against the FCC move.  Here's how some of the top tech companies and industry executives reacted to Thursday's controversial vote: Netflix We’re disappointed in the decision to gut #NetNeutrality protections that ushered in an unprecedented era of innovation, creativity & civic engagement. This is the beginning of a longer legal battle. Netflix stands w/ innovators, large & small, to oppose this misguided FCC order. — Netflix US (@netflix) December 14, 2017 Internet Association  Michael Beckerman, President and CEO of The Internet Association, an industry organization whose members include Facebook, Amazon, Google, Microsoft, and Salesforce issued a statement on the IA's website with plans to fight back. “The internet industry opposes Chairman Pai’s repeal of the 2015 Open Internet Order. Today’s vote represents a departure from more than a decade of broad, bipartisan consensus on the rules governing the internet. Relying on ISPs to live up to their own ‘promises’ is not net neutrality and is bad for consumers. “Let’s remember why we have these rules in the first place. There is little competition in the broadband service market – more than half of all Americans have no choice in their provider – so consumers will be forced to accept ISP interference in their online experience. This is in stark contrast to the websites and apps that make up Internet Association, where competition is a click away and switching costs are low. “The fight isn’t over. Internet Association is currently weighing our legal options in a lawsuit against today’s Order, and remains open to Congress enshrining strong, enforceable net neutrality protections into law.” Google Google statement on #NetNeutrality repeal. pic.twitter.com/WVgmswBCJW — Mark Bergen (@mhbergen) December 14, 2017 Reddit  Reddit's user community has been incredibly active in speaking out against the repeal of net neutrality, and the company itself is also pro-net neutrality. On Reddit, CEO Steve Huffman issued a statement from him and founder Alexis Ohanian thanking users for their activism and expressing disappointment and the desire to fight back. "Nevertheless, today’s vote is the beginning, not the end. While the fight to preserve net neutrality is going to be longer than we had hoped, this is far from over. Many of you have asked what comes next. We don’t exactly know yet, but it seems likely that the FCC’s decision will be challenged in court soon, and we would be supportive of that challenge. It’s also possible that Congress can decide to take up the cause and create strong, enforceable net neutrality rules that aren’t subject to the political winds at the FCC. Nevertheless, this will be a complex process that takes time. What is certain is that Reddit will continue to be involved in this issue in the way that we know best: seeking out every opportunity to amplify your voices and share them with those who have the power to make a difference."  Read the full comment here. Twilio Business Insider received a statement from Twilio, written by Twilio general counsel Karyn Smith. “Today’s vote to roll back net neutrality protections is a clear indication the FCC is moving away from its role to protect consumers. An open internet is vital to maintain competition and foster innovation – and for that we need basic ground rules and a transparent process to enforce them. We look forward to working with Congress to enact basic ground rules and a transparent process to enforce them.  They should also direct the FCC to use its authority to ensure that consumers have access to the communications they want to receive.”  Microsoft president and chief legal officer Brad Smith spoke out on Twitter: The open internet benefits consumers, business & the entire economy. That’s jeopardized by the FCC’s elimination of #netneutrality protections today. — Brad Smith (@BradSmi) December 14, 2017 Facebook chief operating officer Sheryl Sandberg spoke out on her personal Facebook page.  Airbnb co-founder and CEO Brian Chesky weighed in via Twitter, speaking for himself and his company.  The FCC’s vote to repeal net neutrality is wrong & disappointing. A free & open internet is critical to innovation, an open society, & widespread access to economic empowerment. @Airbnb will continue to speak out for net neutrality. — Brian Chesky (@bchesky) December 14, 2017  SEE ALSO: 'We are disappointed': Tech firms are speaking up against the FCC's plan to kill net neutrality Join the conversation about this story » NOW WATCH: The differences that matter between Splenda, Equal, Sweet’N Low, and sugar

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Rupert Murdoch laid out his vision of TV's future after the Disney-Fox deal, and it raises a lot of questions

Rupert Murdoch walked through the thinking behind the Disney-Fox deal. Murdoch thinks that entertainment TV programming supported by advertising will be a tough business moving forward. His point of view raises questions about the future of ventures like Hulu, and also his own broadcast network Fox (which wasn't sold to Disney). Rupert Murdoch doesn’t see much of a future for anything on linear TV that’s not news or sports — and even for sports he sees an impending challenge from Facebook. On Thursday, the media mogul went into detail about the thinking behind his blockbuster sale of 21st Century Fox’s entertainment and TV assets to Disney for $54.2 billion. And he didn't paint a rosy future for a lot of traditional TV. “People watch television differently, not ‘news’ or ‘business,’ but ‘entertainment’ they watch very differently,” Murdoch said in an interview on Fox Business. Basically, Murdoch said people like to watch programs like TV dramas or comedies at their own pace, in a “nonlinear” way. To Murdoch, the only “must-see” TV anymore is news and sports, which are inherently live. (Sorry, “Game of Thrones.”) This shouldn’t come as a surprise to anyone who has watched the rise of Netflix, but it gets more intriguing when Murdoch walks through the implications. “There is no loyalty to them,” Murdoch said of individual broadcast networks, presumably including Fox (Fox Broadcasting Company), which he is actually not selling to Disney. “There’s loyalty to individual programs.” From Murdoch’s point of view, individual shows are what customers are loyal to, and they want to watch them on-demand (unless those programs are sports games). That isn’t just bad news for TV networks, but also for anyone trying to sell advertising against entertainment programming. “It’s very hard to monetize that with advertising,” Murdoch said of the on-demand trend in customer behavior. If Murdoch is right, and that type of programming lends itself more to an ad-free model like Netflix or HBO, what does that mean for Hulu (now 60% owned by Disney)? And what does it mean for Facebook and YouTube, which are pushing toward “premium” ad-supported video? Heck, what does it mean for the Fox broadcast network Murdoch's company still owns (beyond sports or news programming)? Murdoch didn't address these questions, but he did assert that as far as news and sports were concerned, the remaining assets of Fox were “preeminent and strong.” Still, how long can that last? Murdoch also mentioned a challenge coming for sports rights, particularly from Facebook, which is ready to shell out hundreds of millions of dollars. If sports rights get stripped away, will the remaining assets of Fox transition into purely a TV news company? Whatever happens will be largely dictated by the moves of giants coming from Silicon Valley. Murdoch pointed out Apple, Netflix, and Facebook as three companies he thought would be big players in the battle over the future of TV.SEE ALSO: IT'S OFFICIAL: Disney will buy 21st Century Fox film and TV assets for $52.4 billion Join the conversation about this story » NOW WATCH: Why planes are de-iced

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The Fed could pump the brakes on bitcoin's 1,500% rally

The Federal Reserve on Wednesday raised its benchmark interest rate 25 basis points to a range between 1.25% and 1.5%. Don Ross, the CEO of PDQ Enterprises, operator of CODA Markets, a Chicago-based dark pool, thinks further rate hikes could pump the brakes on bitcoin's eye-popping rally.   "I don't like to feed the beast, but it's hard to resist." Don Ross, CEO of PDQ Enterprises, operator of CODA Markets, a Chicago-based dark pool, is talking about bitcoin. He's a skeptic of the red-hot digital coin, which this year has soared an eye-popping 1,500%. The rise of bitcoin, which at last check was trading at $16,519 a coin, has taken both Wall Street and Main Street by surprise. But Ross said its appreciation makes sense. And might be connected to the activity of the Federal Reserve, which Wednesday announced a hike in its benchmark interest rate. "The reason why it is believable is because of our outgoing Fed chair and her predecessor and the amount of credit that has been created in the last decade," Ross told Business Insider in an interview.  The Fed, under chair Janet Yellen and her predecessor Ben Bernanke, kept interest rates at/near zero from 2009 to 2016. The Fed rate is the basis for how much banks charge people to borrow money. When the rate is low, credit is cheap and people borrow more. "When the amount of leverage in the financial system or credit not backed by savings greatly exceeds the value of the actual assets of the global economy, which is currently the case, fundamentals have nothing to do with the prices at which things trade at," he said. Momentum has everything to do with those prices, according to Ross. "The interest rates are so low, there's so much funds that need to get invested somewhere and it is impossible to get a yield," Ross said. Momentum can feed on itself because as asset prices appreciate investors think they got in on the right move and go in more. According to Ross, further hikes of the Fed's interest rate could potentially take the wind out of bitcoin's sails. "There's no fundamental reason for why bitcoin is going up, and there won't be a fundamental reason for why it goes down," he added. "It will be some catalyst or trigger and that could be the Fed raising interest rates." A former version of this post referred to Don Ross as the CEO of CODA Markets. He is the CEO of PDQ Enterprises, which operates CODA Markets.SEE ALSO: A company investing in the future of bitcoin tech is splitting its stock in 10 after it soars 1,600% Join the conversation about this story » NOW WATCH: The CIO of a crypto hedge fund reveals why you should be cautious of the ICO bubble

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THE BOTTOM LINE: Bitcoin mania, a Nobel Prize-winning economist talks Trump, and a deep dive on unstoppable tech stocks

This week: Business Insider CEO Henry Blodget discusses the meteoric rise of bitcoin. He references a recent research note published by former Merrill Lynch chief investment strategist Richard Bernstein, who refers to the cryptocurrency as "bitcon." Blodget walks through Bernstein's assertion the bitcoin meets all five characteristics of a bubble: available liquidity, leverage, democratization, new issues and turnover. The good news for bitcoin speculators is that Bernstein thinks the rally will continue until the Fed siphons off liquidity. Business Insider editor-at-large Sara Silverstein, who is generally a bitcoin enthusiast, recognizes that it could be a bubble, but nothing like past catastrophic ones like the tulip bubble. She says it could end up drawing some parallels to the tech bubble, however, because after that market blowup, tech remained a large asset class and a big part of the market. Blodget then points out that there's no real way to value bitcoin, and that efforts to do so are absurd. In the near to medium term, Silverstein still sees lots of money flowing into bitcoin and the cryptocurrency space at large. Blodget and Silverstein then discuss the argument that we're nearing "peak media" in the US. According to a recent study, the average US adult spends 12 hours a day consuming tech and media, and Blodget says that's been driven by the rise of the internet. He doesn't see the amount of time used to consume media increasing meaningfully going forward. Business Insider senior editor Josh Barro sits down with Paul Krugman, a Nobel Prize-winning economist and distinguished professor of economics at the City University of New York. They start by addressing the one-page sheet released by the Treasury department this past week, which argued that President Trump's economic policies — including the tax bill — will shrink the government deficit. Krugman says that the gross domestic product (GDP) growth forecast put forth was pulled out of thin air, with no backup. He notes that the projections are roughly nine times that of the Joint Committee on Taxation's forecast. Krugman says that even the most ideal policy in the world would fail to boost GDP by 7%. Barro asks if the tax plan as proposed will boost economic growth at all, and Krugman says he's not particularly optimistic about it. He notes that many of the studies that have been done don't touch on the impact of the national deficit on growth, and says that many of those organizations are using an inexact definition of growth. Krugman says that even if GDP ends up being positive, gross national product could end up being negative. Barro then poses the question of whether corporate tax cuts will significantly benefit US workers. Krugman says that there will probably be some positive impact, but only in the longer term, not in the immediate term. He predicts that US workers won't see a noticeable wage increase in the next five years. Krugman then goes on to say that, overall, the tax bill won't have a pronounced negative effect on conditions in the US. He thinks that when the economy is near full employment, we should pay down debt and not run up additional obligations, but ultimately doesn't see any sort of crisis resulting from it. Krugman doesn't attribute the recent run up in stocks to the GOP tax bill. He notes that stocks are up about the same amount all around the world, which is certainly not specific to Trump. In terms of the economy, he doesn't think Trump deserves credit for how strong it is, considering no actual policies have been put into place. He also mentions that the economy has been adding jobs at a steady rate for years now. Krugman shares his thoughts on the Fed, and says that while he saw no reason to push out Yellen, that Jerome Powell will be an adequate replacement. However, he says he's afraid of Fed board appointments, considering the GOP has been defiantly wrong about everything monetary for the past decade. He does note that the board hasn't historically had much impact on policy, with the chairman controlling a great deal of it. Barro asks Krugman for his thoughts on Trump's threats with regards to global trade, including a withdrawal from NAFTA. Krugman says something like that would be a huge issue, and points out that there's no such thing as American manufacturing — that it's more accurately described as North American manufacturing, considering how interconnected the US has become with Mexico and Canada. He says disrupting NAFTA would be very costly, and says that trade will be the way we can tell whether there's any Trump unorthodoxy left. From a labor perspective, Krugman says that immigrant workers aren't competing with US-born ones anymore, but rather other immigrants.  In the Fidelity Insight of the week, Silverstein sits down with Matt Fruhan, a portfolio manager at the firm, about where there are opportunities in equities. He says that his funds have started tilting a little more towards value in the last couple years. On a three- to five-year basis, he says he looks at earnings growth and yield, relative to valuations. Fruhan notes that growth has picked up in the last few years, with tech leading the way. He says that quantitative easing has led to an abundance of capital in the market, something he doesn't see as particularly sustainable. Fruhan shares his thoughts on FANG stocks, which he says are loved by consumer and are offering a great deal of growth. He notes that companies like Facebook and Google have done a great job penetrating the online ad market and taken a lot of share. Fruhan then says that in order for the companies to hit current estimates, they're going to have to gain even more advertising market share. He thinks that until we see slower growth or different capital costs, it's going to be tough to change how the market values these mega-cap tech companies. Join the conversation about this story »

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Tim Cook teamed up with Charles Koch to write a pro-immigrant op-ed about 'dreamers' (AAPL)

Apple CEO Tim Cook and Koch Industries' CEO Charles Koch teamed up to write an editorial published in The Washington Post.  In the op-ed, they call for Congress to pass legislation so that so-called "dreamer" immigrants can stay in the United States. President Trump plans to remove protections for dreamers on March 5. Apple and Koch Industries don't seem to have a lot in common: one is public, the other is private and closely held by the Koch family. Apple sells premium phones and laptops. Koch Industries has holdings in lots of industries, particularly in the energy sector. But the CEOs of the two companies have teamed up to write an op-ed for The Washington Post published on Thursday that expresses support for "dreamers," or immigrants who came to this country when they were young but who lack a permanent legal status.  "The United States should not hold hard-working, patriotic people hostage to the debate over immigration — or, worse, expel them because we have yet to resolve a complex national argument," Apple CEO Tim Cook and Koch Industries CEO Charles Koch wrote in the jointly-authored piece.  Currently, just under 700,000 dreamers are protected by a Barack Obama-era program called DACA, which President Trump plans to end on March 5.  "Congress should act quickly, ideally before year’s end, to ensure that these decent people can work and stay and dream in the United States," the CEOs wrote.  Cook previously said that Apple employs 250 dreamers in an email to company staff.  "I want to assure you that Apple will work with members of Congress from both parties to advocate for a legislative solution that provides permanent protections for all the Dreamers in our country," he said in the September email.  Read the entire op-ed at the Washington Post.SEE ALSO: IBM wants lawmakers to protect dreamers by the end of the year and is going all out to persuade them Join the conversation about this story » NOW WATCH: Here's why Boeing 747s have a giant hump in the front

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Oracle topped Wall Street targets, but the stock is sinking over 4% (ORCL)

Oracle reported strong quarterly results after the closing bell on Thursday afternoon, beating Wall Street expectations. Even so, the stock is down more than 4% in after-hours trading at the time of writing. The database giant posted: Quarterly revenue of $9.63 billion, versus an analyst estimate of $9.57 billion, and up 6.2% year-over-year. Adjusted earnings of $0.70 per share, compared with estimates of $0.68. In a press release, Oracle attributes much of its growth to its cloud computing business, which it says grew 44% from the year-ago period to revenues of $1.5 billion. Oracle's cloud computing software and services compete head-to-head with the likes of Amazon Web Services and Microsoft Azure, which are seen as the leaders in the enterprise cloud market. Amazon Web Services is expected to do $18 billion in revenue this year, while Microsoft's cloud computing business is on a $20 billion annualized run rate.  It's led to a major cloud computing battle, as Amazon and Microsoft release new products to steal away Oracle customers, even as Oracle chairman Larry Ellison and Amazon engage in an ongoing war of words over who owns the future of the market. Oracle CEO Mark Hurd said in Thursday's announcement that the company expects to close $2 billion in enterprise cloud software subscription deals over the next four quarters, reflecting the company's emphasis on the cloud.SEE ALSO: Amazon kicked off its huge cloud conference with a big dig at Oracle's Larry Ellison Join the conversation about this story » NOW WATCH: Scott Galloway says Amazon, Apple, Facebook, and Google should be broken up

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The FCC repealed net neutrality and cable companies fell (CMCSA, TMUS, TWX, S, VZ, CHTR)

The Federal Communications Commission voted to repeal net neutrality rules on Thursday. Many of the major telecom companies were down after the vote. The Federal Communications Commission, chaired by Ajit Pai, voted to reclassify the internet as a Class I utility, turning over so-called net neutrality regulations put in place in 2015. After the vote on Thursday, blocking, throttling and paid prioritization by internet service providers will no longer be prohibited. Pai and his fellow Republican commission members have said reversing the rules will return the telecom industry to a period of light-touch regulation that will spur growth and investment in the sector. The new rules are not set to go into effect for 60 days, in which critics are sure to file lawsuits to stop the rules from going into place. To no avail, the two Democratic commissioners, as well as many members of Congress on both sides of the aisle, asked Pai and his commission to delay Thursday's vote. Many of the largest internet providers in America started the day down in anticipation of the FCC's vote, and all but Comcast ended the trading session lower than their open. The S&P 500 started the day in positive territory but ended the day down 0.39%. Here's how the major internet providers ended the day after the vote: Verizon (VZ) -1.04% at $52.34 AT&T (T) -0.79% at $37.74 T-Mobile (TMUS) -1.27% at $62.56 Sprint (S) -1.05% at $5.63 Comcast (CMCSA) +1.40% at $39.12 Charter (CHTR) -0.10% at $328.68 CenturyLink (CTL) -1.67% at $16.47 Telus (TU) -0.74% at $37.62 Time Warner (TWX) -0.46% at $89.65 Read more about the net neutrality vote, and what it means for you, here.SEE ALSO: The FCC is expected to repeal net neutrality on Thursday — here's what that means for you Join the conversation about this story » NOW WATCH: We talked to the bond chief at the $6 trillion fund giant BlackRock about the most important issue for markets right now

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JPMORGAN: Here are our bond market awards for 2017

Each year, JPMorgan makes an annual tongue-in-cheek list of bond market awards. The bank named Jay Powell the central banker the year while giving Janet Yellen the lifetime achievement award. Check out all of the awards below.   JPMorgan makes an annual tongue-in-cheek list of bond market awards. Here it is for 2017... Bond of the Year – Veolia 0% due 11/20. It’s not that a BBB-rated French company was able to borrow at ZERO percent, it’s that they actually charged lenders a premium for the privilege of holding their debt: 100.078 on the reoffer, or a negative yield to maturity of -0.03%! Either lending in the public markets isn’t what it used to be or we’ll look back on this as another symptom of over-exuberant monetary policy distortion. My only question is, if they had over EUR 1B in interest, why did they only issue EUR 0.5B?!? For those wondering, I am happy to report that we passed on the new issue. Central Banker of the Year – Jerome “Jay” Powell. Honestly, I love the choice. He’s a very balanced blend of real markets experience and official institutions ideology. He’s willing to challenge the consensus views at times, but once a decision is made, he has a history of getting behind it and making it work. But how on earth did he do it?!? He was on no-one’s list at mid-year, yet effortlessly took down Cohn, Yellen, Taylor and Warsh. We should keep a very close eye on him – he’s politically more astute than he gets credit for. Now, Jay…just painlessly ‘normalize’ and deregulate so that you get re-nominated next year! Lifetime Achievement Award – Janet Yellen. She’s done it! She’s the first Fed chair in about 40 years without a recession on their watch. She also started the normalization process with both rates and the balance sheet…while keeping the economy rolling ahead and the capital markets humming. I hope we continue to hear her policy musings in the future…she’s one cool lady! Currency of the Year – Mexican Peso. Wait a minute…wasn’t that currency supposed to be dead and buried with a new US president and administration hell-bent on ‘America first’ and protectionist policies? It’s a powerful reminder that a currency can get oversold and that there are two sides to the trade. Congrats to Banxico for stepping in to support their currency with a powerful policy response and to the investors that happily went along for the ride. Comeback Player of the Year – Developed Market Government Bonds. I know I’m a bond manager but, frankly, I’m getting a little tired of this. Wasn’t this supposed to be the year that we saw central banks tighten monetary policy, stimulus from DC and government bond yields reset at higher levels? The global economy is just fine and inflation is OK – sure, we’d like a bit more of both – but where is the need for these emergency central bank policies that are keeping real yields at zero? While it is true that the yield of the entire US Treasury market is up about 25 bps this year, longer maturity yields are actually down and the Treasury index has generated a positive total return of over 2% so far in 2017. It’s time for central banks to take the punch bowl away and let bond yields find their own level without the distortion and price-insensitive buying they have created. Unsung Hero – The Yield Curve. So important, but so misunderstood. If it weren’t for a flattening yield curve, bond market returns would look poor if not negative. In some respects, it was just BAU: the Fed raises rates and the curve flattens around where investors play ‘guess the terminal Fed funds rate’. This time around, moderate inflation expectations and the ongoing torrent of cash exported from overseas into the US market also weighed on the long end of the US yield curve. It has since created some anxiety in the markets as flattening yield curves are the traditional precursor to recession. We’re not worried. For the time being its pretty normal and we’ll see what happens to the curve when the Fed and ECB dial down the size and growth in the balance sheets. What WOULD worry us is an inverted yield curve. BTW: the runner up in this category was European bank capital notes. Good yield, tidier loan books and onerous regulation designed to prevent another crisis – what’s not to like? Villain in a Leading Role – Bitcoin. I confess that I was getting worried about a month ago. Every asset class and asset was so well behaved, I wasn’t sure we would even have the award this year. And then it happened – like a holiday miracle – Bitcoin went vertical. We know the unprecedented amount of money printing has created significant asset price inflation – but where was the bubble? We always have one at this stage in the cycle which needs bursting. One of the great definitions of an asset bubble is that you can graph the price of the asset on a logarithmic chart, and if there is upward curvature in the line – BUBBLE! Well, here it is. I’m not going to waste my time explaining the sound concepts of ‘store of value’, ‘blockchain’ or ‘digital currency’. They will all make more sense to me once a central bank administers them. But moves of 10-20% in a day reek of monetary excess and mania. Rookie of the Year – Cross Currency Swap Basis. Who knew that this little known domain of currency and bond geeks would emerge into the spotlight as the prerequisite for understanding 2017 capital market flows? In short, the pools of capital resident outside the US are finding their way into US assets, and are then hedged back to their home currency. The calculation on the cost of the currency hedge is based off of the differential in short term interest rates and helps to quantify the yield and/or return potential of the investment. For the bond market, shape of the yield curve in the US and the home market are important, for other asset classes, not so much. Anyway, when the cross currency swap improves, foreign flows accelerate into the US; when it declines, flows tail off. Fed normalization is going to make this a heck of a lot more fun in 2018! Runners up – Corporate bonds and municipals. Just grinding appreciation all year…every back up was met with buying…BORING. Tax reform ought to impact these sectors next year as both the amount and type of issuance should change along with the base of potential buyers. Most Valuable Player – QE. I really wanted ‘volatility’ (the absence of it) to be the MVP, but I just couldn’t do it. We knew that the vast pool of money printed via QE was sloshing around the markets and depressing volatility while inflating prices. There was no point fighting it, and we along with other investors made money by just going with it. Sure the macro economy was fine…sure corporate fundamentals were improving…sure central banks were being patient in withdrawing accommodation. But how to explain the rich valuations across markets? The benign backdrop simply created the cover for the vast pools of liquidity to flow into markets. This time next year it will be different. The global Central Banks’ aggregate balance sheet will shift from expansion to contraction. Then we will see if investors had been picking up nickels in front of a steamroller since Q1 2016!SEE ALSO: The definitive guide to buying your own bitcoin Join the conversation about this story » NOW WATCH: 1,500 happily married people say the key to lasting relationships isn’t communication — it’s respect

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A company investing in the future of bitcoin tech is splitting its stock in 10 after it soars 1,600%

The Crypto Company, a cryptocurrency firm building out the capital markets for bitcoin, is splitting its stock after an eye-popping month. The company's stock, which trades in the OTC market, soared more than 1,600% to $312 a share since December 1. Cryptomania is sweeping Wall Street and it is sending the stock of crypto-linked companies to incredible new heights. The Crypto Company has not been immune. The firm, which is building out the capital markets infrastructure for the nascent digital coin market, announced Wednesday evening it plans to split its stock into ten after soaring more than 1,600% since December 1. The company started trading in the over-the-counter markets in June at around $3 a share. It soared to an all-time high of $642 a share on December 12, according to Bloomberg data. It was trading at $312 just before market close on Wednesday. “We hope that an increased float will contribute to a more orderly and safer market for our stock and corresponding investors," the company's CEO Mike Poutre said in a statement. "All investors should be cautious when they see volatile markets such as this." Companies typically split their stock in order to deflate the price to levels on par with peers in the market. Apple notably split its stock in 2014. Investors got seven shares for every stock. The stock split comes at a pivotal time for the cryptocurrency market, which is under pressure to meet exploding demand and volumes as coins like bitcoin soar to eye-popping heights. Total trading volumes across all of the cryptocurrency exchanges, according to CoinMarketCap, have nearly quadrupled since early November to near $40 billion a day. To put that in perspective, the New York Stock Exchange sees $50 billion worth of shares trade in a day. "When bitcoin crossed $10,000 a few weeks ago all the exchanges went down because of volumes," Poutre said. "Our strategy is to invest in the capital markets infrastructure for crypto." For instance, the company is looking into projects to improve exchange latency, the speed at which exchanges communicate data to traders. On Wall Street exchanges and traders communicate in fractions of a second. In crypto, it can take as much as three seconds. That's the equivalent to a lifetime, according to Poutre. "If Wall Street were to get in here they would have a field day fixing this stuff," he said. Poutre said the company's rise is tied to the number of problems in the space begging to be fixed. The company, which was founded in March of 2017, expects to be profitable in 2018.Join the conversation about this story » NOW WATCH: Cryptocurrency is the next step in the digitization of everything — 'It’s sort of inevitable'

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We asked 2 of Citigroup's top executives what they look for when hiring senior investment bankers (C)

Citigroup's investment bank has been showing signs of progress and competing among Wall Street's best. We asked two of the bank's top executives what they look for when hiring senior investment bankers. Performance matters, but it's not the only thing. "We can't have people on solo missions," says Raymond McGuire, Citi's global head of corporate and investment banking. Citigroup's investment bank has been making strides in recent years to compete for top honors in the league tables. The bank, already a strong performer in arranging bonds and loans, has made marked progress in 2017 in both its mergers-and-acquisitions advisory and equity-capital markets businesses. One key to Citi's success is talent — retaining their top performers, but also bringing in star bankers that will fit into Citi's team culture.  "The foundation to this, the bedrock to this is talent. You have to make certain that you have the talent that is the best trained, that has the best experience, that can exercise the most refined judgment," said Raymond McGuire, global head of corporate and investment banking, who's personally involved in every major strategic hire for his department. Citi has hired more than 20 at the managing director level around the world for its corporate and investment-banking division this year, according to a memo McGuire sent his staff in early November. And the bank this week promoted 33 staff in its corporate and investment bank to managing director, along with seven staff in capital markets origination.  Business Insider recently spoke with McGuire and Tyler Dickson, the global head of capital markets origination, about what they look for in hiring senior-level bankers: Responses have been lightly edited for length and clarity.SEE ALSO: We asked a top hedge-fund recruiter what it takes to get a senior-level job these days McGuire's overall strategy revolves around both attracting and maintaining strong performers who are also "culture carriers" — no solo missions allowed. That means getting involved in every major hire. "You have to attract and retain the best talent. So for the existing talent, you’ve got to make certain that they continue to perform, that they continue to be engaged and inspired to be the best. And for the talent that you onboard, you have to be really careful about the talent that you onboard. They have to not only be the best practitioners, but they also have to be culture carriers. And we have found that, while we've had some challenges, for the most part we've been very effective at integrating new people into the culture. In large part, we do that from the outset. I personally get involved in every one of these major strategic hires. "It's very clear that you not only have to maintain the best of the existing talent. You cannot ignore that. You have to maintain it, you have to focus on that. And you also have to make sure that the talent that you onboard has got a value system and has got an alignment that is very clear. There should be no ambiguity in terms of what our objectives are. None." What question does he ask potential candidates to find out whether they're the right fit? "There's not one question that you ask, there are a series of questions. What kind of character do they have. What kind of client impact. How is that client impact reflected in their performance, historically. And character gets to whether they are a team player or whether or not they're on solo missions. We can't have people on solo missions, we need to have people who are prepared to engage as partners.  "We also recognize that you have to have a combination of management and leadership. You have to be able to give people the details on a daily basis on the metrics that we expect for them to manage to. And then you have to be able to inspire them." For equity capital markets, Dickson looks for leaders with years of experience and the respect of investors and issuers. But they also have to be comfortable sharing the spotlight. "In the business of financial services, talent is the most valuable resource, if you can get the best talent. From Citi's perspective we want the best-in-class, best-performing people in the marketplace. So experience matters. In my case, if we're looking at the equity capital markets arena, are they leaders with issuer clients? Do they have the respect of investing clients? Do they have years of experience in their sector or subproduct? "But I'd say what's also important is culturally for Citi, we're a firm that succeeds as a team, and so they have to be people who can fit in with Citi's overarching culture. But also within capital markets, we're very much a team-wins orientation, and so you need a lot of leadership and energy and inspiration to lead the team, but we want people who think when we're winning it's because the team is winning. And I think that the folks that we've developed, and I've said we've been blessed with this consistency, all feel like partners in the business." See the rest of the story at Business Insider

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10 things you need to know before the opening bell (SPY, SPX, QQQ, DIA, UBS)

Here is what you need to know. The Federal Reserve hikes rates. The US central bank on Wednesday lifted its key interest rate by 25 basis points to a range between 1.25% and 1.50%, and it said it expected three rate hikes in 2018. The FCC is set to vote on repealing net neutrality. A repeal would be good for large telecommunications and internet companies but would most likely mean higher prices and fewer choices for consumers. It's a big day for central banks. The Swiss National Bank, the Bank of England, and the European Central Bank all meet on Thursday. The head of UBS' $1 trillion wealth-management business departs. UBS Wealth Management's boss, Juerg Zeltner, will leave the bank at the beginning of 2018. He will be replaced by Martin Blessing, the former CEO of the German lender Commerzbank. Ripple becomes the 4th-largest cryptocurrency. The cryptocurrency designed for banks and global money transfers reached a market cap of $18.64 billion on Wednesday, surpassing litecoin as the fourth-largest cryptocurrency. Deutsche Borse is thinking about launching European bitcoin futures. The German exchange Deutsche Boerse says it will take "some time" before deciding whether to launch futures contracts. A company investing in the future of bitcoin tech is splitting its stock in 10. The Crypto Company, which builds out the capital-markets infrastructure for cryptocurrencies and trades on the over-the-counter market, announced plans to split its stock in 10 after soaring more than 1,600% since December 1. Stock markets around the world trade mixed. China's Shanghai Composite (+0.68%) outperformed in Asia, and Germany's DAX (-0.54%) lags in Europe. The S&P 500 is set to open up 0.26% near 2,670. Earnings reports trickle out. Adobe, Costco, and Oracle release their quarterly results after markets close. US economic data is heavy. Initial claims, retail sales, and import and export prices will all be released at 8:30 a.m. ET. Then, at 9:45 a.m. ET, Markit PMIs will be released. The US 10-year yield is up 3 basis points at 2.37%.Join the conversation about this story »

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IT'S OFFICIAL: Disney will buy 21st Century Fox assets for $52.4 billion (FOXA, DIS)

Disney will buy Fox's film studio and a large chunk of its television production assets for $52.4 billion. Disney Chief Executive Officer Bob Iger will remain at the company through 2021. The deal announcement follows months of interest from multiple parties, including Disney, Comcast and Verizon. Disney has agreed to acquire 21st Century Fox's film studio and a large chunk of its television production assets for $52.4 billion. Fox shareholders will receive 0.2745 Disney shares for each unit of Fox stock they own.  The package that Disney is buying reportedly includes Fox's A&E and Star TV networks, as well as its regional sports operation, movie studios, and stakes in Sky and Hulu, among other assets. The deal will leave Fox with its news and sports assets. Disney Chief Executive Officer Bob Iger will remain with his company through 2021 to "provide the vision and proven leadership required to successfully complete and integrate such a massive, complex undertaking," Orin Smith, lead independent director of the Disney Board, said in the press release. There was some speculation Iger could leave Disney to enter the 2020 election. The deal announcement comes amid considerable interest for Fox from not just Disney, but also the likes of Comcast and Verizon. The Wall Street Journal and CNBC reported in November that Comcast and Verizon had approached Fox about buying at least part of the company, providing the first signs of a bidding war. Now that deal terms have been agreed upon, the new entity will have to contend with rating declines across many large cable networks as more consumer opt for cheaper and more customizable web-based services. This story is developing.SEE ALSO: WALL STREET: More blockbuster mergers are coming Join the conversation about this story » NOW WATCH: THE BOTTOM LINE: The iPhone X's biggest myth, investing overseas, and why you should buy gold

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The 5 issues to consider before trading bitcoin futures

Greg Dwyer, head of business development at BitMEX, a bitcoin derivatives exchange based in Hong Kong, talks with Business Insider executive editor Sara Silverstein about what investors should know about trading bitcoin futures. Following is a transcript of the video. Sara Silverstein: Help me understand how these bitcoin futures are going to work. Your betting on a future price of bitcoin. What is the underlying, what's the reference point, how do they decide? I've seen a lot of different bitcoin prices every single day.   Greg Dwyer: There are two main contracts being launched. There’s the CBOE and the CME which is coming out a few weeks later. The CBOE is pricing against the Gemini auction which settles at 4 p.m. eastern time. Whereas the CME is looking at a more broad, diverse index comprising of four exchanges. That's going to be referenced at 4 p.m. London time. Silverstein: So explain to me what are the issues for having an underlying like bitcoin that isn't something that's regularly traded on an exchange. Dwyer: Well first of all is the fact that bitcoin trades 24/7. Whereas these contracts are only going to be trading basically 24/5. They’re closed for the weekend plus they have these trading limits in place of 20% — hard limit up and down. So potentially we could see no trading occur. If there's a 20 percent move over the weekend. And it opens that limit up on Monday and then no one's going to be able to open or close positions until the following day. Silverstein: Which is likely. Dwyer: Right, so this also introduces, I believe, five other concerns given the fact that this does not trade like a regular, say, stock on an exchange, such as the NYSE. Market manipulation, also there’s potential of systems overloading. There’s potential of DDoS attacks, there’s hard forks, and finally the way that these contracts are margined. Silverstein: So Market manipulation, how does that work? Dwyer: So let's take the CBOE contract for example. This is one exchange which compromises a relatively small amount of bitcoin dollar-traded volumes globally. So there are concerns that they could be priced — adverse price movements — due to this illiquidity. Or some bad actors in the space trying to move the price at settlement. The CME contract being more diversified on four exchanges alleviates this problem a bit. Silverstein: And what about the DDoS attacks? What is that? Dwyer: DDoS basically means that you're trying to take down a system by overwhelming it with a large amount of traffic from various sources. We’ve seen various exchanges this week become partially unusable because they've been subject to DDoS. So this could be a large issue going into settlement and we see DDoS happening on these exchanges thus making settlement unlikely. Silverstein: And what about the margin? How concerned are you about the fact that your margin requirements are going to be in cash versus like on the BitMEX exchange people are holding their their margins in bitcoin. So if you have a short position and bitcoin goes up by 10X. Then all of a sudden your margin requirements go through the roof and if your margin’s held in bitcoin, you’re covered. But if it's held in cash that that's not the case. Dwyer: Exactly, it's not easy to cash out bitcoin from an exchange and thus use to cover your unrealized losses on your short position. So this is going to introduce a very interesting element in to how the prices are actually going to evolve for the forward structure of the futures curve. Silverstein: Explain to me what the system overload issue is.   Dwyer: Recently we’ve seen a number exchanges have performance issues. With the run up to $19,000, we saw a number of exchanges collapse under the pressure. They crashed and they went down for half an hour to a few hours. Other exchanges had issues whereby you couldn't submit orders or if you could, you weren’t getting fills back until several minutes later.  As we get more institutional money coming in and arbitrage across the various exchanges between spot, futures and so on, we should see more and more flow coming in. And this presents a real problem for exchanges — how are they going to handle with this increased amount of volume. Over the past year, we’ve seen volumes go up from 80 times. And I imagine that they are going to increase by another 10X before the end of the year. Silverstein: So explain to me what happens if your underlying forks, because this is not something we see with any other futures contract. Dwyer: So there needs to be clear guidelines as to how the futures exchanges are going to handle this. They could think of the fork as potential dividends that they reinvest. So, in fact, the Nasdaq has come out stating that they’re going to treat this as a reinvestable dividend and they’re going to look at the prices of some of the parts. Now from what I understand CME and CBOE haven't come out with any clear guidance yet as to how they’re going to treat the fork. And this is a real issue because some exchanges might be listing the original bitcoin, under the same name bitcoin, whereas you might have some other exchanges listing the new chain bitcoin as bitcoin. So now you have different types of bitcoin being traded, but still under the same term — “bitcoin.” So as a futures exchange where they’re trading bitcoin futures, this presents a problem in pricing the contract. So they need to come up with clear guidelines as to how they’re going to solve this problem, which they have not as of yet. Join the conversation about this story »

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Disney and 21st Century Fox used 4 words that should make employees nervous (DIS, FOXA)

Dinsey has agreed to buy 21st Century Fox's studio and television production assets for $52.4 billion. The companies said in a press release the acquisition will result in at least $2 billion in "cost savings from efficiencies."   Disney has agreed to acquire 21st Century Fox's studio and television production assets for $52.4 billion. 21st Century Fox shareholders will receive 0.2745 Disney shares for each 21st Century Fox share they own. In the press release announcing the deal, the companies used four words that should make Disney and 21st Century Fox employees nervous: "cost savings from efficiencies." "The acquisition is expected to yield at least $2 billion in cost savings from efficiencies realized through the combination of businesses, and to be accretive to earnings before the impact of purchase accounting for the second fiscal year after the close of the transaction," the release said.  In corporatespeak, "cost savings from efficiencies" indicate areas where investment bankers or the firms involved in the deal have identified redundancies or opportunities to make the combined company leaner, thus saving on costs. While synergies can also mean cutting redundancies in things like software and machinery, a large chunk of the savings typically comes from reduced employee headcounts. As we've pointed out, these synergies often aren't what they're cracked up to be and don't help earnings after mergers. Many of these cost-cutting measures may never come to fruition. Bob Bryan contributed reporting. SEE ALSO:  Join the conversation about this story » NOW WATCH: One type of ETF is taking over the market

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Bitcoin's value is skyrocketing here's how to figure out if you should sell

It's a tough choice to decide whether to sell some of your bitcoin or keep all of it invested. Some experts recommend selling between 20% and 50% if you are risk-averse or have pressing financial needs. It also makes sense to sell some of your bitcoin if you don't want to wait years for a potentially massive payoff. If you had invested $100 in bitcoin seven years ago, it would be worth around $28 million today. Even if you had hopped on the train three years ago, a $100 investment in 2014 would be worth $5,000 today. Of course, those lucky early investors can't just spend those earnings right away — they'd have to sell their digital currency first. That's created an agonizing dilemma for people with thousands of dollars in their virtual wallets: Should they cash in on some of their investment now, or leave it untouched, potentially earning them even more money, but risking a crash that could leave them empty-handed? Some cryptocurrency experts recommend cashing in a portion of your bitcoin now, especially if you're risk-averse or have pressing financial needs. "If someone's looking to pay the bills, it may be logical to take out, say, a month's worth of necessities," Josiah Hernandez, chief strategy officer of the bitcoin ATM network Coinsource, told Business Insider. Someone who needs the money shouldn't feel bad about selling 30% to 50% of their bitcoin, he said, although they should still keep at least half invested. That way, they won't be filled with regret years down the line should bitcoin's value continue to surge. Likewise, Linas Rajackas of the investment services company Kaiser Exchange said it's not a bad idea to sell enough of your bitcoin to make back what you originally put in. "If you have low risk tolerance, and your bitcoin exposure becomes significant, you might consider selling a part to get back your initial investment and keep the remaining amount of bitcoin without any risk," Rajackas told Business Insider. However, if you don't have your eye on a new house, car, or other major investment, you should stay put, they both said. After all, bitcoin hit a high of over $17,300 this week, and is up more than 1,500% from last year, and the upside is well worth the wait, they say. Still, there are plenty of risk-taking investors who aren't touching the cryptocurrency. JPMorgan CEO Jamie Dimon called the currency "a fraud" that will "end when people lose a lot of money," for example. Meanwhile, Bridgewater Associates founder Ray Dalio called bitcoin "a bubble" that is destined to pop. But for the loyal investors who have stayed with bitcoin for years, the potential for huge earnings is too high to pass up. "I would never advise anyone to sell all of their bitcoin," Aaron Lasher, cofounder of the digital asset company Bread, told Business Insider. However, he said selling 20% to 30% is a reasonable strategy for those who don't want to wait years for a potential windfall. "My target price for bitcoin is really really high — I'm thinking $250,000 a coin within five years. But I'm willing to wait 10, so my time horizon is huge, Lasher said. "The real magic is that it is up to the individual. It is their money and they get to do with it whatever they want."SEE ALSO: People are putting their homes at risk to buy Bitcoin Join the conversation about this story » NOW WATCH: Cryptocurrency is the next step in the digitization of everything — 'It’s sort of inevitable'

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Citigroup's new managing-director list is out here are the investment bankers and traders who just got promoted (C)

Citigroup just announced a new class of 120 managing directors in its Institutional Clients Group. "A promotion to Managing Director is a career-defining accomplishment and each of these individuals makes a remarkable, differentiated contribution to Citi, fulfills our Leadership Standards and embodies our Mission of Progress," Jamie Forese, CEO of the Institutional Clients Group at Citigroup, said in a memo. The Institutional Clients Group includes, among other operations, Citi's investment banking and trading teams. Citi's Global Consumer Group, which houses its retail and commercial banking departments, promoted another 58 to managing director, bringing the firm-wide total to 178, a company spokesman confirmed.  The promotions take effect January 1, 2018.  Here are the names from the Institutional Clients Group memo:  Corporate and investment banking Nicholas Blach-Petersen Marina Donskaya Bronstein Jonathan Cain Rob Chisholm Billy Cho Katrina Efthim Morten Eikebu Fernando Fleury Amulya Goyal Israel Halpert Richard Hawwa Patti Guerra Heh Bob Jackey James Jackson Martijn Jansen Ward Jones Rob Jurd Matt Kenney Dan Kim Hiroki Kondo Rebecca Kruger Lydia Liu Vassilios Maroulis Alex Mulley Matt Musa Sam Norton Louise O'Mara Ayan Raichaudhuri Roberto Severin Mike Shelly Cathy Shepherd Milos Stefanovic Rizwan Velji Capital markets origination Shane Azzara Chris Chung Lawrence Cyrlin Marzena Fick Christopher Herzog Malte Hopp Harish Raman Markets and Securities Services Alex Altmann Bouhari Arouna Saquib Ayub Sam Baig Antonella Bianchessi Helen Brookes Jia Chen Laura Coady Zack Comey Mbar Diop Madlen Dorosh Omar El Glaoui Paul Favila Ross Goldstein David Gonzalez Chris Gooch Meng Gu Adam Halvorsen Alex Knight Nikhil Kohli Hubert Lanne Lorenzo Leccesi Norman Leung Aida Mastura Jabaz Mathai Sid Mathur Prach Mishra David Mitchell Joe Narens Jeffrey Oh Cameron Parks Matt Passante Nikheel Patel Cristina Paviglianiti Harry Peng Brandt Portugal Joe Reel Al S'Aeed Marcus Satha Alec Schoeman Scott Secor Vikram Soni Larissa Sototskaya Rafael Souza Nate Stone Jim Suva Christopher Tedeschi James Teoh Sonali Das Theisen David Ji Um Johny Vlachakis Hsiao Chi Wang Matt Watson Xiaopo Wei Matt Zhang Private bank Dimitri Andreadakis Nancy Bertrand George Cherry Garcia Froome Hui Gao Fred Hess Ray Ho Steve Kwei Laurence Mandrile-Aguirre John Mitchell Bola Oyesanya Heather Rich Treasury and Trade Solutions Rachel Brown Esther Chibesa James Lee Magdalena Mielcarz Deven Somaya ICG Operations & Technology Hirokimi Hidaka Gulrez Jamada Carey Ryan Vanderlei Silva Venkat Vajipeyajula International Franchise Management Ahmed Bozai Pablo Del ValleJoin the conversation about this story » NOW WATCH: Cryptocurrency is the next step in the digitization of everything — 'It’s sort of inevitable'

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The Feds forecasts for the economy confirm what everyone already knows about the GOP tax cut plan

Fed Chair Janet Yellen says the prospect of tax cuts has been built into Fed forecasts for some time, and the central bank does not expect a major boost to growth. Yellen said tax cuts were discussed by Fed members at this week's meeting, which culminated in an interest rate increase. The Federal Reserve raised interest rates on Wednesday and released a new batch of economic forecasts that very much reaffirm conventional wisdom among economists about the Republican tax cut plan: it will not do much to boost economic growth. Despite claims by the Trump administration that the cuts, which most analyses view as skewed toward corporations and wealthy individuals, will boost growth, the Fed predicts that economic growth will benefit only marginally, if at all, from the tax cut plan. Fed officials’ median forecast for 2018 growth did climb to 2.5% in December from 2.1% in September, and Yellen said the prospect of tax cuts are "a factor supporting this modestly stronger outlook." But she emphasized in the opening remarks of her press conference that many officials "noted uncertainty remains about the macroeconomic effects of measures that may be implemented." "Most of my colleagues factored in some fiscal stimulus," Yellen said, but have done so throughout the year, meaning the forecast rise from September "should not be viewed as estimates of the tax package." The central bank’s forecasts are well below President Donald Trump’s 3% growth target, and flies in the face of claims that there would be sharp boosts to wage growth from the Congressional measures, which look increasingly likely to become law. The Fed’s interest rate hike this week marks the fifth such increase since December 2015. Policymakers are forecasting another three rate increases next year, although concerns about low inflation, which has consistently undershot the central bank’s 2% target, give some market participants pause about that pace of rate increases.SEE ALSO: The GOP tax plan is a 'catastrophe' that'll make inequality 'materially worse' Join the conversation about this story » NOW WATCH: Here’s why your jeans have that tiny front pocket

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FED HIKES, STOCKS HIT RECORD HIGHS: Here's what you need to know

US stocks climbed, adding to gains in the afternoon after the Federal Reserve hiked interest rates 25 basis points and boosted its economic growth outlook for 2018. The S&P 500 was little changed, while the Dow Jones Industrial Average increased 0.4% and the more tech-heavy Nasdaq 100 climbed 0.2%. First up, the scoreboard: Dow: 24,596.43, +91.63, (+0.37%) S&P 500: 2,663.31, -0.25, (-0.01%) Nasdaq: 6,874.99, +12.79, (+0.19%) US 10-year yield: 2.40%, +0.018 WTI crude oil: $56.66, -$0.48, -0.84% 1. Fed raises interest rates as Yellen's term nears its end. As expected, the central bank increased the federal funds rate by 25 basis points. This will eventually lift the interest rates banks charge for various consumer-credit products, like mortgages and loans. 2. Yellen called bitcoin a "highly speculative asset." She added that the cryptocurrency "plays a very small role in the payments system" and that it's not a "stable store of legal tender." 3. A wildly popular stock market strategy is hotter than ever. The so-called "buy the dip" method has enjoyed an unprecedented period of popularity and success. 4. The mysterious trader known as '50 Cent' has lost $197 million betting on a stock market meltdown. The trader has consistently purchased bite-sized chunks — usually costing around 50 cents — of options contracts betting on a spike in the the CBOE Volatility Index, or VIX. 5. Litecoin’s record week keeps going. The cryptocurrency has been on a hot streak this week, up 122%, after creator Charlie Lee appeared on CNBC Monday morning. ADDITIONALLY: Here's the new Fed dot plot The Fed has raised interest rates again — here's how it happens and why it matters Bitcoin slumps below $16,000, futures trading halts temporarily ICO funding soars above $4 billion as US regulators crack down Target pops on news of its latest acquisition to fend off Amazon Target is fixing its biggest weaknessSEE ALSO: The mysterious trader known as '50 Cent' has lost $197 million betting on a stock market meltdown Join the conversation about this story » NOW WATCH: How to buy and sell bitcoin using one of the most popular cryptocurrency apps on the iPhone

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Three-fourths of Republican voters say they support net neutrality and party lawmakers are starting to speak out against repealing it

The Republican-led Federal Communications Commission will vote to repeal its net neutrality rules on Thursday. Some Republican members of Congress are asking the FCC chairman to delay the vote. A recent poll found three out of four Republican voters want to keep the net neutrality rules. The Republican-led Federal Communications Commission is slated to repeal its net-neutrality rules on Thursday, but many members of the party aren't on board with the move. With a recent poll indicating that three-fourths of Republican voters oppose the repeal effort, members of the party's congressional contingent have started to speak out against it. In an open letter sent Tuesday, for example, Rep. Mike Coffman of Colorado asked FCC Chairman Ajit Pai to delay the planned vote. Coffman, a Republican, posted the letter to Twitter: Thx to everyone who has contacted me in regards to #NetNeutrality. Below is the letter I sent to Chairman @AjitPaiFCC today to ensure the continuation of a free and open #internet. pic.twitter.com/oKqh7lxaLI — Rep. Mike Coffman (@RepMikeCoffman) December 12, 2017 Rep. Jeff Fortenberry, a Republican from Nebraska, also tweeted a statement against the net neutrality repeal: I recently urged Federal Communications Commission Chairman Ajit Pai to preserve the framework of net neutrality. The upcoming decision should not allow for corporate monopolistic domination, whether internet service provider delivery or content creators. #NetNeutraility — Jeff Fortenberry (@JeffFortenberry) December 11, 2017 Meanwhile, Sen. Susan Collins of Maine, and representatives Dave Reichert of Washington, Mark Sanford of South Carolina, and John Curtis of Utah — all Republicans — have recently expressed support for net neutrality and indicated they are skeptical of the FCC proposal, the International Business Times reported. A spokesperson for Pai didn't respond to requests for comment.  The breaking of ranks from Republican lawmakers comes as a poll from the University of Maryland shows that the net neutrality rules have wide support among the party's voters, the Washington Post reported. The FCC is set to vote on the repeal proposal Thursday morning. With three Republican commissioners who are opposed to the net-neutrality rules constituting a majority of the commission, the proposal is expected to pass. SEE ALSO: The FCC plans to repeal net neutrality this week — and it could ruin the internet Join the conversation about this story » NOW WATCH: Here's why Boeing 747s have a giant hump in the front

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Apple didn't make an equity investment in Finisar (AAPL, FNSR)

Apple announced on Wednesday it is giving one of its laser manufacturers, Finisar, $390 million. Many outlets reported the news as an "investment." Finisar said in a statement on Wednesday evening that Apple had not made a debt or equity investment in the company.  On Wednesday, Apple announced that it had given a chip and laser manufacturer, Finisar, $390 million out of its "Advanced Manufacturing Fund." The stock soared as investors believed that Apple had taken a stake in the company, and multiple outlets reported the announcement as an "investment."  CNBC's Jim Cramer, for example, called it a "fantastic" deal and said it turned the chipmaker into an "entirely different company" in a bullish take on the deal. Apple announced its manufacturing fund on Cramer's show in May.  But, as it turns out, the $390 million wasn't an investment at all — Apple didn't purchase any equity or debt from Finisar. The Sunnyvale-based laser company clarified in a statement that Apple hadn't invested in Finisar at all.  Instead, the $390 million "award" was basically an order for iPhone parts going forward. Here's the full statement:  "Questions have arisen regarding news reports of Apple Inc.’s (“Apple”) announcement this morning regarding a $390 million award to Finisar Corporation (“Finisar”). Apple has not made a debt or equity investment in Finisar. The amount referred to by Apple represents anticipated future business between the companies over a period of time." Finisar is one of two suppliers of "VCSEL lasers," a key component in the latest iPhone's facial recognition camera, True Depth.  Last week, Finisar announced that it had purchased a factory in Sherman, Texas for $20 million. "This new site will be used to expand our manufacturing capacity for VCSELs using 6-inch wafers." Jerry Rawls, Finisar CEO, said during the company's quarterly earnings call, although he did not mention Apple and said he could not disclose customer demand for its parts.  Apple's money will "create 500 high-skill jobs" at the factory, Apple said in a press release on Wednesday. Apple's press releases about the award did not use the word "investment" to describe the award, and nor did Apple CEO Tim Cook's tweet about the partnership.  Apple launched its manufacturing fund after President Donald Trump pressured the company to create manufacturing jobs in the United States. Earlier this year, Apple's $1 billion fund gave Corning $200 million, which was described as an "investment" in the press release.  SEE ALSO: Apple CEO Tim Cook: 'How can we get more people to do advanced manufacturing in the United States?' Join the conversation about this story » NOW WATCH: France's $21 billion nuclear fusion reactor is now halfway complete

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Finisar soars after Apple awards $390 million order (FNSR, AAPL)

Finisar, the maker of specialty chips for the Apple iPhone X and AirPods, is trading up 26.84% at $24.43 a share after Apple awarded the company a $390 million order*. Finisar is hoping to reopen a manufacturing plant in Texas with the help of Apple's investment. The plant is expected to create 500 jobs in the area. The new plant will produce laser sensors that enable technology like FaceID, ARKit and the proximity features of the AirPods. The investment is part of a larger $1 billion plan from Apple, which falso included an investment in glass maker Corning.  Finisar shares are down 16.63% this year, including Wednesday's gains. *This post was corrected to say Apple awarded the company a $390 million order. Previously it said Apple made a $390 million investment in Finisar. The headline has been changed to reflect the correction.  Read more about the deal here.SEE ALSO: Apple is investing $390 million into a company that makes chips for the iPhone X and AirPods Join the conversation about this story » NOW WATCH: How to buy and sell bitcoin using one of the most popular cryptocurrency apps on the iPhone

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Someone is selling a 'spectacular' penthouse in Miami but they're only accepting bitcoin

A penthouse in Miami is selling for the equivalent of about $547,000.  The seller is only accepting bitcoin.  Bitcoin has surged more than 1,500% this year.    For 33 bitcoins, this "spectacular" penthouse in Miami could be yours. That was the equivalent of about $547,000 on Wednesday.  The one bedroom, 1.5 bathroom apartment is listed on a number of real estate portals including Redfin, Remax, and Coldwell Banker. "PRICE? ONLY ACEPTING (sic.) BITCOIN," the listing said. Since Redfin doesn't yet list properties in bitcoin, the $33 listing price fell below its minimum-price threshold, and the apartment was not available for a tour.  According to public records on Redfin, it was last sold in January 2016 for $315,000 and gained 7.4% annually since then. Justino Ferret, the agent on the property, told Business Insider that this seller is only accepting bitcoin.  The cryptocurrency has surged more than 1,500% this year against the US dollar as it gained popularity with Wall Street and retail investors.  On Tuesday, Joseph Borg, a securities regulator, told CNBC that he had seen mortgages being taken out to buy bitcoin. Borg likely was specifically referring to a home-equity line of credit, which allows homeowners to loan from their property's value for other purposes. The idea of using a house as an ATM machine grew in popularity as the housing bubble peaked in the mid-2000's. Converting home equity to bitcoins is not advisable, said Nela Richardson, the chief economist at Redfin. "You're taking money out of an asset class that is highly regulated and putting it into something whose value is based on no regulations," she told Business Insider.  "We think this home for sale is more of a rare event than the start of a larger trend," she added. SEE ALSO: Bitcoin bull Tom Lee has identified 12 stocks that are perfect if you don’t want to own it Join the conversation about this story » NOW WATCH: The Fed is trying to prepare for the next recession without causing it

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The FCC will vote Thursday to repeal net neutrality here's what that means for you

The FCC will vote Thursday to repeal the net neutrality rules it put in place in 2015. The repeal will likely mean higher prices and fewer choices for consumers. The repeal is good news for large telecommunications and internet companies. In a move that could fundamentally reshape the internet — and spur a new wave of legal wrangling — the Federal Communications Commission on Thursday will vote on a proposal to repeal its net neutrality rules. The vote will take place during the FCC's monthly meeting, which starts at 10:30 a.m. Eastern Time. With Republicans who oppose those rules in control of the commission, the proposal is basically guaranteed to pass. Here's what you need to know about net neutrality, the proposal, and what's likely to happen next: What's net neutrality? Net neutrality is the principle that all traffic on the internet should be treated equally. Under net neutrality protections, internet service providers (ISPs) are barred from blocking, slowing, or providing preferred treatment to particular sites and services. The rules are designed to keep the internet open to all comers and give everyone a fair shot. Without net neutrality protections, ISPs could block you from streaming video from Netflix or YouTube or charge you extra just to access those sites. On the flip site, they could force Netflix or YouTube to pay them to ensure that their videos were streamed to their users at the same speed and quality as other video sites. Such moves would likely force you to pay more to view and access the videos and other information you regularly get through the internet. They also could limit your choices if the ISPs block access to particular companies' sites or charge those companies tolls that only the biggest and richest among them can afford. The FCC has had some form of net neutrality protections in place since 2005. After two different versions of the rules were struck down by the courts, the FCC in 2015 officially designated broadband providers as telecommunications companies, a move that allowed it to put in place new rules grounded in its authority over such companies under Title II of the Communications Act. The latest proposal from the FCC would reverse the designation of broadband providers as telecommunications companies and do away with the three major net neutrality prohibitions. Under the new proposal, companies would be able to block, slow, or provide fast lanes to particular sites or services. Their only responsibility under the proposal would be to disclose such practices to customers. The FCC would leave it up to the Federal Trade Commission to determine whether broadband companies were doing anything they hadn't disclosed. Why does the FCC want to repeal net neutrality? When it comes to his philosophy regarding telecommunications companies, FCC Chairman Ajit Pai, a former lawyer for Verizon, is a free-market libertarian. He's ideologically opposed to even the idea of the FCC regulating such companies. He opposed the FCC's 2015 rules and announced even before he became chairman that he would seek to overturn them.  But ideology will only get you so far when it comes to changing regulations; agencies have to have a reasonable rationale for reversing themselves. Pai's main argument for doing away with the net neutrality rules is that they have depressed industry investment. Broadband investment can take different forms, but it usually results in faster, more reliable networks that are available to more people. Those are outcomes that partisans on both sides of the net neutrality debate support. The problem with Pai's argument is the data he himself cites doesn't support his claim that investment is falling. Instead, that data shows that broadband investment has basically been flat since 2013, with a lot of variation among the different companies. Meanwhile, a study from consumer advocacy group Free Press indicates broadband investment has actually increased since the 2015 net neutrality rules took effect. Regardless, some companies have significantly cut back on their investments in recent years. But even just looking at those companies, none has blamed their reduced investment on the net neutrality rules. What happens after the repeal? The rules won't take effect for a matter of months — some 60 days after they are published in the Federal Register. In the meantime, consumer advocacy and other groups will almost certainly file suit to try to block them. Members of Congress, particularly Democrats, will also likely introduce legislation to try to overturn them. Assuming the rules take effect on schedule, broadband providers — wired and wireless alike — would be free to create so-called "fast lanes" for their own sites and services and those of partners who pay for the privilege. They'd also be free to charge you extra to access certain services like streaming video, or block or slow down sites or services that compete with their own — or that they simply don't like. Any of that and likely more would be fair game under the FCC's new regime. The only obligation broadband providers would have would be to tell you what they're doing. However, you can bet such disclosures will likely come in the kind of fine print that few of us understand or even read. Who benefits from the repeal? The big telecommunications companies including AT&T, Verizon, and Comcast are cheering the impending death of the net neutrality rules, in part because they think the repeal will allow them to make more money and give them more control. But even the large internet companies that support the rules — including Google, Amazon, Facebook, and Netflix — will likely benefit from their demise. There's a good chance, once the rules are gone, that broadband providers will try to make internet companies pay to transmit their web sites, stream their videos, or send their data to the providers' customers. And the internet giants, with their deep pockets, are the companies in the best position to afford those tolls. The end of the rules could end up cementing the dominance of the big tech companies by thwarting their potential competitors and disruptors. Who loses? Normal internet users like you and me will lose out with the repeal of the net neutrality rules. It won't happen overnight, but you can expect broadband providers to start limiting what you can access on the internet or charging you more to get to the sites and services you regularly use. Also, entrepreneurs and smaller internet companies — the people and startups pioneering new kinds of services or aiming to be the next Netflix, Google, or Facebook — could lose out if they can't afford the broadband companies' potential tolls. What's next? The main action on net neutrality is likely to move to the courts after the FCC vote, but a decision likely won't come until at least a year after the repeal. Given the broad public support for net neutrality, there's a good chance lawmakers or the FCC will try to reinstate the rules if Democrats regain the majority in Congress next year or the White House in 2020. Come back to Business Insider on Thursday, when the FCC's meeting starts. We'll have all the news as soon as it breaks.SEE ALSO: Three-fourths of Republican voters say they support net neutrality — and party lawmakers are starting to speak out against repealing it Join the conversation about this story » NOW WATCH: What those tiny rivets on your jeans are for

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A partner has left Tourbillon Capital, a struggling New York hedge fund

Kartik Joshi, a partner at hedge fund Tourbillon Capital, has left. The New York firm has struggled this year. Tourbillon's flagship fund is down -11.6% this year through November.   Kartik Joshi, a partner at New York-based Tourbillon Capital, has left the fund, people with knowledge of the matter said. Joshi was Tourbillon's sector head for technology, media and telecommunications investments. The people asked not to be named discussing private matters. Tourbillon, founded by Jason Karp and which managed $3.4 billion as of earlier this year, has been losing money recently. The Tourbillon Global Master Fund lost -4.6% in November. From the start of this year through November, the fund is down -11.6%, according to an investor update seen by Business Insider. Karp has been warning of "frothy speculation" in the markets and has been preaching patience in client letters. Before launching Tourbillon, Karp was a portfolio manager at Steve Cohen's SAC Capital and a co-chief investment officer at Carlson Capital.SEE ALSO: What it takes to launch a hedge fund right now, according to the Wall Street pros who know MUST READ: We asked a top hedge-fund recruiter what it takes to get a senior-level job these days Join the conversation about this story » NOW WATCH: Warren Buffett lives in a modest house that's worth .001% of his total wealth — here's what it looks like

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Apple's Shazam deal is a sneak attack to hit Spotify where it hurts (AAPL, GOOG)

Apple bought Shazam for $400 million, which makes it one of the company's largest acquisitions in years. Shazam makes the most sense inside Apple's music division, which falls under SVP Eddy Cue.  Apple is unlikely to be interested in Shazam's advertising business.  Apple has yet to reveal its plans for Shazam, the popular music recognition app it acquired for $400 million on Monday.  And given the iPhone maker's penchant for secrecy, chances are good that it will be some time before we learn anything about Shazam's future under Apple — if we ever do at all. But if you connect the dots, a couple things about this deal are already clear:  1. Shazam is almost certain to continue to exist as a standalone app 2. This deal is all about Apple Music and data. If the addition of Shazam works the way Apple hopes, the deal will round-out the arsenal that supports its fledgling music streaming service. And with the competition and the stakes in the streaming business growing, the deal is an admission by Apple that it needs to make bold new bets to assure its place in a post-music-download world. Just as the $3 billion Beats acquisition in 2014 provided the foundation for Apple Music, the purchase of Shazam could help Apple take its streaming product to the next level.  It's another high-profile music deal for Apple Since launching a music-recognition app in 2009, Shazam's product has evolved considerably. Shazam now offers advertising features and augmented reality capabilities with ecommerce potential.  But as vague as Apple was in its statement confirming the deal, it made a point of explicitly mentioning Apple Music, noting that Shazam and Apple Music were a "natural fit." That "fit," isn't the simple addition of music recognition capabilities (though that will be a nice new feature Apple will be able to bring to its iPhones). It's the music data that Apple gets from owning an app with hundreds of millions of users across different platforms and countries. Early warning system  One of the most underrated aspects of Shazam's business, according to an investor, is that Shazam offers an analytic control center — a "dashboard" — for music industry professionals. Record labels and executives have learned to rely on it to discover songs that are starting to get popular. When someone identifies what a song is through Shazam, that's a pretty strong signal that it's catchy, or distinctive. "Our data has shown that we can typically predict 33 days in advance what's going to be at the top of the Billboard Hot 100," a Shazam executive said in 2014.  Although Apple has access to a lot of similar data from its Apple Music service, Shazam is globally available, and, as Apple pointed out in its statement, is widely downloaded on non-Apple platforms. That gives Apple Music unique insight into the songs, artists and other trends that are about quietly gaining momentum and about to break out. Think of it as an early warning system for hit songs. Apple already has strong human music curation assets, thanks to  the DJs at its Beats One online radio station and the handpicked playlists on Apple Music. By mixing in Shazam's data, Apple will have a chance to dominate the cultural conversation in a way that competitors like Spotify and Google may struggle to match. Another valuable data point that Apple will be able to see now is which Shazam-ed songs lead to an Apple Music subscription — or even possibly Spotify subscriptions.  The app isn't going away Of course, the value of all that data comes from the fact that Shazam is a hugely popular app that's been downloaded more than 1 billion times, and is used by both Android and Apple users. For that reason, it's highly unlikely that Apple will discontinue the standalone Shazam app.  Sure, there's plenty of ways Apple can integrate Shazaam directly into the iPhone itself.  Google recently incorporated similar music-recogntion technology into its high-end Pixel 2 smartphone. Google's version of the technology constantly monitors nearby music from the phone's lock screen, displaying each song title on the phone's screen — a handy feature that Apple would be silly not to emulate.  But Apple would also be silly to kill the standalone Shazam app for Android phones.  Apple didn't comment on whether the Shazam app will remain as a standalone download, but the Shazam announcement of the deal suggests that the app isn't going way, noting that it will "continue innovating ... for our users."  A TV show, too Apple is also getting a piece of a reality show as part of its purchase: "Beat Shazam," which stars Jamie Foxx and received as many as 2.4 million viewers for its most recent episode aired in late summer during the critical 8 p.m. prime time slot at Fox. Season 2 of "Beat Shazam" began production this month in Los Angeles, and Foxx is hosting again. It's expected to air next year.  The concept is simple: Contestants try to beat Shazam's algorithm before it can name a tune. And it fits very neatly into Apple Music's strategy of making video content about music. Apple Music recently has started to produce music-related TV shows to help boost subscribers to Apple Music. But the two shows it has aired so far — "Carpool Kareoke," an adaptation of the James Corden-hosted late night segment, and "Planet of the Apps," a reality show about apps — have received decidedly mixed reviews.  Of course, "Beat Shazam" is a Mark Burnett-produced show, and it's not wholly owned by Shazam, so it's not like Apple bought the rights to stream it on its platform without some negotiations. But it would be surprising if Apple didn't do a little bit of cross-promotion with its new TV property.  Forget about advertising  One part of Shazam that Apple's unlikely to be interested in is what brought the company to profitability in recent years: advertising.  Shazam CEO Rich Riley told Business Insider earlier this year that the company had pivoted away from selling songs and toward advertising as its main source of sales, which helped the company achieve profitability.  He also said that the company made sense an acquisition target for a big company looking for a foothold in music or advertising. But Apple's not looking for a foothold in advertising.  Unlike its Silicon Valley neighbors like Google and Facebook, it sells almost no ads, except for a few App Store search placements. Apple CEO Tim Cook frequently suggests that Apple's lack of advertising business separates it from other tech giants.  So it's hard to imagine that Apple would continue to strike deals with companies like Sauza Tequila or Pepsi to offer deals or unskippable takeover ads inside the Shazam app. Shazam booked $50 million in revenue last year, according to an investor, which is basically a rounding error to Apple.  It's also unlikely that Apple is interesting in Shazam's augmented reality products, despite Cupertino's demonstrated interest in the field. Shazam's AR product was largely based on technology from a company called Zappar, and was based around "Shazam Codes," or a QR-code like marker.  Apple's AR division already has hundreds of employees and its own home-grown technology, such as ARkit and the ability to natively scan QR codes. It's hard to see Shazam's technology playing a big part in Apple's AR push. SEE ALSO: Apple has finally announced the launch of its most powerful computer yet, the $5000 iMac Pro Join the conversation about this story »

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When you visit a web page, there's a better-than-even chance Google knows about it (GOOGL)

Google and Facebook dominate digital advertising, so it's no surprise they're also the leading companies in tracking what you do online.Ghostery, a company that makes a web browser add-on that allows users to see who is keeping tabs as they go from site to site, recently confirmed it. Ghostery conducted a study to see which companies do the most tracking, looking at online activity from numerous countries around the world. As we can see in this chart from Statista, Google easily took the prize for tracking activity, with Facebook a distant second. Tracking allows such companies to serve up personalized ads; they're why you might see a shoe ad days or months after shopping for shoes online. But they also allow those companies to create detailed profiles of us — often times without us realizing it or wanting them to do so. SEE ALSO: Apple Music could get a boost from Shazam, the company's newest addition Join the conversation about this story » NOW WATCH: A guy who reviews gadgets for a living spent a week with the iPhone X and the Pixel 2 — the winner was clear

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Bitcoin bears are being unleashed onto the cryptocurrency's futures market

Interactive Brokers is set to allow its users to go short on bitcoin in the newly launched futures market. It'll give investors a vehicle by which they can bet against the future price of the coin, which is up more than 1,600% this year. One of the largest brokerages is set to allow its clients to short bitcoin, giving folks bearish on the coin a way to bet against it. According to reporting by Bloomberg News, Interactive Brokers will let clients take short positions in the Cboe Global Markets' bitcoin futures market, which launched Sunday. A spokeswoman for the firm told Bloomberg the pivot was "in response to client demand." The company has allowed users to invest in the new market via long positions, requiring a larger down payment for trades than the standard required by Cboe. It is one of the largest players in the market, so far. "Interactive Brokers has a few requirements for shorting bitcoin futures: the spread must be one-to-one, and the short leg must have the earlier expiry date so that once it expires the surviving leg will be long," Bloomberg reported. Prior to the launch of futures, the firm's chairman asked the CFTC to prevent exchanges from launching such a market. Most big Wall Street banks have been more cautious, showing no indication of entering the market in the short term. JPMorgan and Citigroup, two of the largest futures brokers, are not clearing trades for its clients. A person familiar with JPMorgan's operations told Business Insider the firm didn't want to be in the market on day one, citing concerns about liquidity and too much risk being placed on clearing houses if the bitcoin market blows up. When there's enough volumes, the bank might consider dipping its toes into the market. The bank's CEO Jamie Dimon notably called bitcoin "a fraud" in September. Then, the cryptocurrency traded just above $4,000 a coin. Cryptocurrency hype has reached peak levels, with coins across the market hitting new highs on a daily basis and cryptocurrency exchanges under immense pressure to meet spiking demand from more and more users. Bitcoin broke through $17,500 on Tuesday and the entire market for digital coins was close to $500 billion. The first bitcoin futures depend on trading at the Winklevoss twins' tiny exchange — and that's a problemSEE ALSO: SEC head Jay Clayton weighs in on cryptocurrency mania Join the conversation about this story » NOW WATCH: This is what Bernie Madoff's life is like in prison

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What it takes to launch a hedge fund right now, according to the Wall Street pros who know

A handful of hedge fund launches each year grab headlines – usually those expected to raise billions, like one from billionaire Steve Cohen and another from Millennium's ex- bond chief, Michael Gelband. But there are many more fund launches that attract much less attention, with some of those failing to get off the ground at all.  What does it take to launch a fund these days? We asked Wall Streeters who work in the space – namely those that work in capital introductions, introducing potential investors to fledgling start-ups. Here's what they had to say. We've lightly edited transcripts from meetings and emails with those we interviewed.SEE ALSO: We asked a top hedge-fund recruiter what it takes to get a senior-level job these days Goldman Sachs: Dean Backer, global head of sales and capital introduction What have been the biggest trends in 2017? Backer highlighted the robustness of launches in Asian hotspots – Hong Kong, Singapore and Tokyo – while European launches are slightly above average. The US landscape is probably going to end the year right on average, he added. What stands out in particular, according to Backer, is that there is more quality, rather than high quantity, launches. The average sized launch is also bigger. "To get a fund launched in this environment when there is already a lot of product out there, a narrative that's still forming is you really do have to be an experienced manager that can point to past performance, that has a team behind them and generally has had an anchor tenant to get launched," Backer said. The average launch size, whether median or average, is slightly higher, he said. "It's too tough environmentally if you're not one of the top-of-the-game managers," he said. What does it take to launch a hedge fund today?  According to Backer: high pedigree; solid institutional background; experience working in risk-taking role; and consistent outperformance. "Consistent outperformance is the best way to distinguish yourself both internally and externally," he said. Other attributes include anchor investors and locking up with early investors. JPMorgan: Alessandra Tocco, global head, capital advisory group What is the biggest trend you’re seeing in 2017? "Macro allocations are on the rise, outpacing other strategy inflows. At $10.1 billion YTD through Q3, net flows to macro strategies are leading other strategy inflows by a clear margin.  This may be attributable to investors seeking to diversify portfolios as equity values become stretched. It may also be a function of performance among single-risk taker managers, particularly those with material EM exposure. Fundamental long/short which had limited interest at the end of 2016 is starting to gain interest from investors." "Fee compression is one of the most significant trends in the hedge fund space this year, especially with new launches who are not only pricing early fees more attractively, but being very creative around how these scale down over time. [This] ties into the concept below of willing to pay for alpha but not beta." What do managers need to do to start a large, successful fund? "Not all new launches are created equal.  We’ve seen non-traditional arrangements such as VC-backed hedge fund launches and technology firms that have incubated new launches.  Having an edge in terms of working capital can give newer firms an advantage over simply having anchor capital. The key differentiators for managers who want to start with significant capital is to have a differentiated investment process, pedigree and a historical track record. Pedigree (having portfolio manager responsibility at well known prior shops with existing allocator relationships); net worth (need to be able to contribute a real amount of their own capital); plausibility (strategy needs to make sense and be investable now and managers needs to demonstrate clearly defined edge); momentum (need to build and maintain marketing pipeline over a shorter period of time – don’t let it drag on too long); anchor investors that are not traditional LPs (e.g. hedge fund principles); and luck." Credit Suisse: Bob Leonard, global head of capital introduction The biggest trends of 2017: Last year, the story line was that fees were high and funds were underperforming, Leonard said. Investors started asking for better terms, and this year they got it. More hedge funds are offering better alignment of interests with investors, he said. Some of the perks include lower management fees as assets rise, and requiring a hurdle rate – a benchmark the manager has to hit before charging performance fees.  New launches are still having a challenging year, however. He added: 2017 is the year of quants. For managers that don't do quantitative investing, investors are asking them how they'll deal with quant funds in the markets. And investors have also been asking him how to get access to quant funds. "They feel like they can't ignore it," he said. To be a $1 billion launch today, a hedge fund manager needs: An experienced team; a verifiable track record; institutional business with people on staff who know how to run the business side of things; and initial start up capital, according to Leonard. But a word of caution: don't expect to raise money quickly like the old days. Capital raising takes longer, he said. See the rest of the story at Business Insider

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BlackRock's $1.7 trillion bond chief says don't fear the Fed

Rick Rieder, who oversees $1.7 trillion as the global chief investment officer of fixed income at BlackRock, says market fears over Federal Reserve tightening are overblown. He thinks that central banks are "maniacally focused" on not stirring up volatility. As recently as two months ago, uncertainty around the Federal Reserve was among the market's biggest fears. Of particular concern has been the unprecedented unwinding of the Fed's massive balance sheet, which is a reversal of the central bank’s extraordinary measures taken during the financial crisis. Now, with the Fed expected to raise interest rates by 25 basis points on Wednesday, that alleged reckoning could soon be upon us. However, Rick Rieder, the chief investment officer of fixed income at BlackRock, who oversees $1.7 trillion, thinks that any fears around Fed-driven volatility are overblown. In his mind, the central bank is predisposed to keep conditions as calm as possible, and he argues that it simply won't inject chaos into the market. In an interview with Business Insider, Rieder elaborated on those thoughts, and shared some other Fed-related wisdom. He also gave his take on the the GOP tax plan, the equity and bond markets, the rise of exchange-traded funds, and shared his biggest market fear. It was part of a wide-ranging discussion that also included a deep dive into Rieder's hectic daily schedule, which you can read about here. Here's what Rieder had to say (emphasis ours): "The one thing a central bank is not supposed to be is the instigator of volatility, and they won't be. Central banks are maniacally focused on not being an instigant to disrupt markets. As for the changing leadership at the Fed, the Federal Reserve chair tends to act differently than an elected official. They tend to continue the path laid out by the predecessor, while an elected official oftentimes tries to shift gears. Also, when the Fed tightens it's different than easing, in the sense that it can be behind the curve. You want to make sure growth is still durable when you're tightening, which is very different than the easing process, where you want to be fast and ahead of the economy. I think they'll be deliberate in what they do from here."SEE ALSO: Why BlackRock's $1.7 trillion bond chief gets up at 3:30 a.m. Join the conversation about this story » NOW WATCH: This is why you should be buying gold

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The ghosts of the financial crisis are haunting investors 9 years later

Overly cautious investors have missed out on huge market opportunities in 2017, says investment manager Richard Bernstein. That investor reluctance is a byproduct of the last financial crisis, the memories of which still inform cautious behavior to this day. Despite the missed opportunities, Bernstein is still bullish on stocks heading into 2018. The market crash of 2008 was the worst anyone could remember. Now, nearly nine years and a 300% stock market rebound later, stock investors are still grappling with the ghosts of the financial crisis, even as the bull market rages on. The lingering memory has kept investors from capitalizing on prime market opportunities along the way, including this year, which saw the S&P 500 soar 19%, according to Richard Bernstein, the CEO and chief investment officer of Richard Bernstein Advisors. Instead, investors have proceeded with caution, shelling out loads of money to hedge against losses, not wanting to be caught off-guard by another huge market downturn. It's become the new normal for traders, who have embraced the undercurrent of skepticism. "Investors still do not fully appreciate the magnitude of opportunity cost they have paid to alleviate their fears that 2008 would repeat," Bernstein, a former Merrill Lynch chief investment strategist, wrote in a research note. "Fear has caused 2017 to largely be another year of missed opportunities." Bernstein doesn't buy into this fear. He's crunched the numbers, and says the 55% plunge seen in 2008 has an extremely low likelihood of happening again. As shown in the chart below, even a loss of 30% or more has occurred very rarely throughout history. "Drawdowns similar to 2008's have historically occurred only 0.5% of the time!" he wrote. "Yet, both individual and institutional investors have been structuring portfolios as though the markets were necessarily going to replay 2008." Investor psychology after a market crash Despite Bernstein's consternation, the behavior being exhibited by the market is a natural reaction to past trauma. After a catastrophic drop, it often takes investors years to gather enough confidence to re-enter the market. Then, after they've missed that first stretch of gains, doubts around the rally's longevity start to creep in, keeping them from unabashedly loading up on bullish positions. As a result, even the smartest investors can miss out on what, in retrospect, look like easy gains. Ultimately, the whole process serves to show just how difficult it is to play a market rally with the ideal combination of timing and confidence. For another example, look no further than the second half of the 1990s, when stocks were enjoying what still stands as the longest bull market on record. Still stung by the 1987 crash, bearish strategists called for market downturns for years, starting around 1995. That plunge didn't end up transpiring until the dotcom bubble burst in 2000, and many of them lost their jobs along the way. Meanwhile, the bulls that rode the wave higher into the crash were eventually discredited for failing to see it coming. Many investment professionals affected by that cycle are still in the market today, which goes a long way towards explaining the cautiously optimistic tone being derided by Bernstein. Bernstein's 2018 outlook Interestingly enough, it's that same cautious backdrop that's informing Bernstein's bullishness headed into 2018. When investors are wary of their surroundings, it helps keep overexuberance from creeping into the market — the same type of overconfidence that has historically blinded traders from a cracking foundation. Those skeptics are also responsible for the types of temporary pullbacks that are healthy for the market. As soon as major indexes slip a bit, bullish investors are waiting there to scoop up more exposure at more reasonable valuations. This so-called "dip buying" has driven a great deal of equity strength during the bull market. Bernstein's bullish outlook for next year is also built on what it sees as continued earnings growth — a positive catalyst that's frequently viewed as the foremost source of the almost nine-year rally. Further, he sees "significant liquidity" as another source of strength, even as the Federal Reserve engages in monetary tightening. In the end, Bernstein's quasi-cynical view on the 2017 market is one that distracts from the fact that stocks are still surging higher. Sure, some investors have missed out on some gains, but the downside alternative is far more stark. And when that market reckoning does happen, we get to start this process all over again, hopefully with the added benefit of hindsight.SEE ALSO: The next stock market crash will look a lot different from the financial crisis Join the conversation about this story » NOW WATCH: A senior investment officer at a $695 billion firm breaks down tax reform

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10 things you need to know before the opening bell (SPY, SPX, QQQ, DIA, TSLA)

Here is what you need to know.  The Fed meets. The US central bank is widely expected to raise its key interest rate 25 basis points to a range of 1.25% to 1.50% at the conclusion of Wednesday's meeting.  Roy Moore loses in Alabama. Democrat Doug Jones was declared the winner in the Alabama special election on Tuesday, shrinking the Republican Party's Senate majority to just one seat. Tillerson says the US is ready to talk to North Korea. "We're ready to talk anytime North Korea would like to talk, and we're ready to have the first meeting without precondition," Tillerson told former National Security Advisor Stephen Hadley during a question and answer session. "Let's just meet. We can talk about the weather if you want ... But can we at least sit down and see each other face to face, and then we can lay out a map, a roadmap, of what we might be willing to work towards." UK employment drops. The UK's unemployment rate stayed at a record low 4.3% in the three months to October, but 56,000 fewer people held jobs, according to the latest data from the Office of National Statistics.  Bank of America says the bull market has plenty of 'gas in the tank.' The bank's technical team says the chart for 2018 looks a lot like 2014, and that the S&P 500 could hit 3,000 by the end of next year. Litecoin's creator issues a stern warning to investors. "Sorry to spoil the party, but I need to reign in the excitement a bit…," Litecoin creator Charlie Lee tweeted. "Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can't handle LTC dropping to $20, don't buy!"  Tesla hits an 8-week high. Shares of the electric auto maker touched their best level in eight weeks Tuesday, propelled by news that Pepsi reserved 100 of its Semis.  Uber loses its license in a 3rd UK city. The City of York Council's Gambling, Licensing and Regulatory Committee rejected Uber's application to renew its license, citing concerns about the recent data breach and the number of complaints it had received about the service, Reuters says.  Stock markets around the world trade mixed. China's Shanghai Composite (-1.25%) trailed in Asia and Britain's FTSE (+0.10%) clings to gains in Europe. The S&P 500 is set to open little changed near 2,666. US economic is light. CPI will be released at 8:30 a.m. ET. The US 10-year yield is up 1 basis point at 2.41%. Join the conversation about this story »

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Rand Paul says he will vote against budget bill that adds to deficit after voting for deficit-hiking tax bill

Sen. Rand Paul announced in a video on Twitter that he will vote against any government funding legislation. A funding bill must be passed before December 22 — or the federal government will partially shut down. Paul said he is still a "yes" on the GOP tax bill despite official analyses showing that it would add more than $1 trillion to the federal deficit. Sen. Rand Paul announced Tuesday that he will reject any government funding legislation in the coming weeks. Current funding, in the form of a short-term extension passed on Thursday, will expire December 22. Without new funding passed before that date, the federal government would enter a partial shutdown. Paul argued in a video on Twitter that any funding legislation would likely result in a continued increase of the federal deficit. The Kentucky Republican said the current pace of debt accumulation is unsustainable, arguing there should be significant spending cuts to get the debt under control. "I cannot in good conscience vote to add more to the already massive $20 trillion debt," Paul said. "I promised Kentucky to vote against reckless deficit spending and I will do just that. Count me as a 'no' on any budget-busting spending bill." Paul is among a core group of conservatives in the House and Senate that have opposed the funding legislation due to avowed concerns about the federal debt. Leaders from the Republican and Democratic leadership are attempting to hash out a deal, focused on defense spending and other legislative priorities like the Deferred Action for Childhood Arrivals (DACA) immigration program. In a follow-up tweet, Paul suggested he would still support the Republican tax bill, the Tax Cuts and Jobs Act (TCJA). Paul voted for the initial Senate version of the bill. According to the Joint Committee on Taxation, the TCJA would add roughly $1 trillion to the federal deficit even when factoring in increased economic growth from the bill. But Paul tweeted that the tax bill would decrease the size of the federal government, which in his eyes makes it worthwhile. "Tax cuts — people keeping more of their money — are never the problem," Paul tweeted. "The problem is spending. We should obey our rules, stop the deficit spending, and shrink government." Watch Paul's announcement here: I cannot in good conscience vote to add more to the already massive $20 trillion debt. I promised Kentucky to vote against reckless, deficit spending and I will do just that. pic.twitter.com/BUYqm91mli— Senator Rand Paul (@RandPaul) December 12, 2017  SEE ALSO: World leaders think Trump's tax overhaul is dangerous, and they're getting ready to fight back Join the conversation about this story » NOW WATCH: A reporter who met with the former spy behind the Trump-Russia dossier explains why it’s not ‘fake news’

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A top exec at trading giant Virtu is out

Raymond Holmes, the head of client execution services technology at trading giant Virtu Financial, has left the firm, according to people familiar with the matter.  Virtu has been shedding jobs and integrating KCG —  which it acquired earlier this year — into its business.  The future looks bright for the firm, according to analysts.  A top exec at trading giant Virtu Financial has left the firm.  Raymond Holmes, who had been head of client execution services technology at Virtu, is no longer with the company, according to people familiar with the situation. Holmes joined the trading giant when Virtu's acquisition of KCG closed earlier this year.  Holmes got his start at Computer Clearing Services, a New York technology company, in 2001. He graduated from SUNY Fredonia in 1999 with a degree in classical guitar performance and computer science, according to his LinkedIn profile. Holmes' departure comes at a pivotal time for Virtu. The firm has been integrating KCG into its infrastructure, cutting costs and laying off upper management at legacy KCG at a clip. The success of the integration pushed one analyst to boost his price target for the firm. In a note to clients in late November, UBS analyst Alex Kramm said the trading firm has moved quickly: "After shutting down poorly performing offices (e.g. Singapore/Mumbai), closing down Neonet, selling BondPoint to ICE, and removing a management layer from legacy KCG, VIRT has already been able to upsize expense synergies and free up capital." Mifid II, the European regulatory overhaul, is also on the horizon. It will create a new environment in which investment banks will no longer charge for their services - such as investment research and trade execution - in one bundled package. That could benefit trading firms like Virtu, which specialize in execution.Join the conversation about this story » NOW WATCH: The CIO of a crypto hedge fund explains the value in cryptocurrency — and why the market will explode over the next 2 years

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Bitcoin just set yet another record high

Bitcoin reached another record high of $17,580.77 per coin on Tuesday. The gains were fueled in part by the launch of bitcoin futures trading on Sunday.  The cryptocurrency has exploded in popularity, with a major proportion of its gains coming in the last three months.  Even lesser-known cryptocurrencies — like litecoin — have seen a surge in popularity.  Bitcoin is up 1600% so far this year. You can watch Bitcoin's price move in real-time here>> SEE ALSO: Litecoin creator issues stern warning after the cryptocurrency doubles in a single day DON'T MISS: Bitcoin bull Tom Lee has identified 12 stocks that are perfect if you don’t want to own it Join the conversation about this story » NOW WATCH: We talked to the bond chief at the $6 trillion fund giant BlackRock about the most important issue for markets right now

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A Hungarian startup is betting cameras will help it deliver self-driving cars more quickly and cheaply than Waymo (GOOGL, GM)

AImotive, a Hungarian startup, is developing self-driving car technology that relies on cameras, instead of Lidar laser sensors, to detect cars, obstacles, and signs. Its approach differs sharply from Waymo, Uber, and General Motors, all of which are focusing on cars that use more expensive Lidar technology. AImotive thinks using cameras could put autonomous cars on the road faster and at a much lower price than the competition, but some say cameras have big limitations and risks. MOUNTAIN VIEW, Calif. — When it comes to developing self-driving cars, a startup based in Hungary, of all places, thinks it's come up with a better way — one that will get robo-cars on the road faster and at less cost than they would otherwise. Many of the biggest players working on autonomous vehicle technology, including Waymo, General Motors, and Uber, use a bulky laser-based technology called Lidar to let their cars "see" the world around them. But AImotive CEO  argues that self-driving cars don't need Lidar. His company is instead building its autonomous car system around inexpensive, compact, off-the-shelf image sensors, the same ones you'd find in your smartphone or digital camera. "Humans drive with their eyes and brains," noted AImotive CEO Laszlo Kishonti in a meeting this week with Business Insider. "They don't need Lidar." Analysts think AImotive's camera-based approach to autonomous vehicles is risky It's a risky approach. Many self-driving car experts are skeptical that cameras alone will be enough for such vehicles. Cameras can't see through fog and could be flummoxed by dark or snow-covered roads. By themselves, they can't determine distances to objects; although computers can glean such information by analyzing images, their estimates can be highly inaccurate, according to experts. Raj Rajkumar, a professor of electrical and computer engineering at Carnegie Mellon University, called such a system "a very bad idea." A camera-based autonomous car system "would work under many conditions," said Rajkumar, leads CMU's autonomous vehicle project. But, he continued, "under specific conditions that happen on regular basis, it would fail." Kishonti understands such concerns, but he's convinced AImotive's system will work. The entire road system today is designed to be navigated visually and is managed through visual signals, he noted. And if a car using cameras has trouble seeing around it, it can be trained to do what a human driver would do — slow down. To prove his theory, AImotive has already begun test-driving cars equipped with cameras and its autonomous technology on roads in multiple areas around the world, including near its offices here in Silicon Valley. Right now, the company is testing its system with highway driving; Kishonti expects to have it ready to be used for that purpose in production cars in about a year. The company plans to test the tech on city streets early next year and expects it to have that capability ready for within two years, he said. The Hungarian startup already has notable backers and customers And AImotive isn't just another startup that's long on dreams and short on cash and customers. It's already raised $10 million through two rounds of venture financing and is close to closing a much larger third round, Kishonti said. It's backed by companies including Nvidia, Bosch, and Samsung. The company already has 160 employees and offices in Europe, the United States, and Japan. Unlike GM, AImotive isn't trying to build a car. Instead, it's developing technology that could be built into other companies' vehicles. Its partners include some of the biggest car companies, including Volvo and Groupe PSA, which owns Peugeot. There's going to be a lot of appeal among such companies for technology like what AImotive is developing, Kishonti argued. A handful of auto-industry companies — maybe three, he estimated — will be able to develop self-driving cars completely in-house. The other car makers, parts suppliers, and ride-hailing service operators are going to need help from outside, particularly in developing the software that will underlie autonomous driving systems, he said. "Software development is not their bread and butter," Kishonti said. AImotive definitely has an opportunity to carve out a niche in the automotive market, said Egil Juliussen, an analyst who focuses on automotive technology for market research firm IHS. Although the largest car companies and suppliers will likely try to develop self-driving car technology on their own, many of the smaller and mid-sized firms will likely be looking for outside help, he said. While several different companies — including Waymo — are pursuing the same market, AImotive could find success offering a portion of larger self-driving car system, Juliussen said. "Some companies may want use [their technology] so they don't have develop it themselves," he said. He continued: "They don't need to do everything." Cameras have some big advantages over Lidar arrays The appeal of going with a camera-based system is undeniable. Lidar arrays can cost in the range of $80,000, according to Kishonti. By contrast, AImotive is building its system around the use of eight to 10 cameras that cost $15 each. Other startups, such as AutoX are also developing camera-based autonomous driving systems.  Image sensors benefit from the tremendous economies of scale inherent with their being a key feature of basically every smartphone made. Even if Lidar tech matures and prices come down, it's unlikely to be cost competitive with cameras anytime soon, Kishonti argued. And if it does, AImotive's system is flexible enough to incorporate Lidar data, he said. "If we can solve the problem" of autonomous driving by using cameras, "then we don't have to wait for low-cost Lidar," he said. AImotive has some other tricks up its sleeves besides cameras And AImotive is working on other ways to lower the cost and speed the development of its technology. Kishonti's background is in chip development; AImotive is working on its own processor that will be far more efficient for self-driving car tasks that a traditional computer chip or even a graphic processor, he said. Meanwhile, it plans to rely heavily on its sophisticated simulator technology to virtual test its cars and get them up to speed. Waymo recently touted the fact that its autonomous cars have driven 4 million miles on real roads. But the vast majority of those miles are likely uninteresting from a development standpoint, Kishonti said, because they didn't pose any real challenges or allow engineers to test how the system would work in certain conditions. AImotive can be much more efficient by running multiple simulations at once that focus on the conditions it wants to test, he said. "We can accelerated our development faster than just using real-world testing," he said. But the company faces some big challenges To be sure, AImotive has its work cut out for it. It's not alone in using simulators; GM and Waymo are both using them to test and improve their self-driving car software. Even if AImotive can use simulations to rapidly improve its own software, it's still going to need to do plenty of tests on actual roads. "Just because (something) worked in a simulator — you still have to test it in the real world," said Rajkumar. "Simulation is necessary but not sufficient." And analysts and autonomous-vehicle experts remain skeptical that cameras alone will be sufficient to make self-driving cars safe. Such cars are likely going to need not only Lidar arrays, but also radars, in addition to cameras, particularly when when visibility is limited or in inclement weather, they said. "We strongly believe you need all three sensors," Juliussen said. What was it like to drive in AImotive's robo-car? Read about our somewhat unnerving test drive on BI Prime.SEE ALSO: GM plans to mass produce self-driving cars 'in a matter of quarters' — and it offered rides in one for the first time this week Join the conversation about this story » NOW WATCH: I've been an iPhone user for 10 years — here's what happened when I switched to the Google Pixel 2 for a week

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A Hungarian startup thinks it has the key to cheaper self-driving cars but a ride in its test car suggests it has a lot of work ahead (GOOGL, GM)

AImotive is developing self-driving car technology that relies on inexpensive cameras, rather than a pricey Lidar system. The company recently began testing a car equipped with its technology in Silicon Valley. I got a test ride, and it was an unnerving experience. MOUNTAIN VIEW, Calif. — Covering the development of self-driving cars has offered some unique experiences. I've ridden in a car with no one in the driver's seat. I've ridden in one that had the driver's seat turned around so that it faced the backseat. And I've ridden in one that piloted itself around the narrow, hilly streets of San Francisco. But until last week, I'd never ridden in a self-driving car that sensed the world around it entirely with cameras. And I've got to say it wasn't the most reassuring experience. The car — a late-model Toyota Prius — was a test vehicle equipped with technology from AImotive, a Hungarian startup (Hungary is primarily known in the automotive world for its tiny, toy-like "microcars"). AImotive is developing autonomous vehicle software that relies on cameras rather than laser-based Lidar arrays to detect vehicles, pedestrians, and other obstacles. Cameras cost a small fraction of Lidar systems, and the company is betting that by using them instead, its partners will be able to deploy self-driving cars faster and at a lower price. Even at this early stage in the era of self-driving cars however, the sight of a vehicle without lidar is almost as jarring as that of a car without a steering wheel. Our ride began like many ongoing test drives in autonomous cars, with a human driver behind the wheel and with another human in the passenger's seat monitoring the car's sensors and autonomous driving systems. But this ride was a bit different in that the human driver actually piloted the vehicle for a while. AImotive is only testing its cars on highways right now At the moment, AImotive has only developed its technology enough to road test it on highways; it won't begin to test it on city streets (a more challenging environment for autonomous cars) until early next year. So AImotive's driver had to steer us from the company's house-like office at the end of a dead-end street in an industrial area here to the entrance to Highway 101, Silicon Valley's north-south artery. AImotive's system didn't kick in until we were already on the freeway, heading south. Unlike other autonomous vehicles I've ridden in, this one lets you know when the computer is in control — it has a box on its dash that illuminates the word "self-drive." The AImotive engineers turned on the system, and we were under robot control. The first thing I noticed was that the car kept drifting to the right side of the lane we were in. It never crossed the line, but it repeatedly got uncomfortably close. It was particularly disquieting near the beginning of my ride, when a semi-truck with a trailer was immediately to the right of us. A part of me was wishing AImotive's human driver would take control and steer us back to the center of our lane and away from the truck. Laszlo Kishonti, AImotive's CEO, said it wasn't clear why our car was drifting to the right of its lane. It's possible, he and his colleagues suggested, that it had to do with the road being banked, but they also said it was likely just "a math problem." "We are trying to find that reason," Kishonti said. He continued: "I think we'll solve this in the next two weeks." The startup has a lot of work ahead But it wasn't just the drifting that was unnerving. As we headed south, another car cut right in front of us. When it did, the human driver immediately took control and applied the brakes. The system could have handled the situation, but likely would have slowed down much more abruptly than the human driver did, because it hasn't yet been tuned for such scenarios, Kishonti said. The test drive took place around 1 p.m. on a bright and clear day. In front of him, Bence Varga, AImotive's head of European sales, who road in the front-passenger seat, had a computer monitor that showed what car's cameras and systems could see. The display showed the view from the various cameras, labeled the lane lines in front of us, and identified the cars around us. Lane drifting and sudden stopping aside, the big question for AImotive is how well its system will do at night, in the fog, or in other low-visibility conditions. Unlike Lidar or radar systems, regular cameras have similar limitations to human eyes in such situations — they just can't see very far. Kishonti said AImotive's system will respond to them the way human drivers do — by slowing down. It remains to be seen if that will be good enough for consumers, AImotive's customers, or regulators. Regardless,my ride seemed to indicate that even on the basics of highway driving, the company still has a lot of work ahead of it.SEE ALSO: Waymo's CEO says self-driving cars are 'really close' to being ready for the road — but plenty of challenges remain Join the conversation about this story » NOW WATCH: What happens when vegetarians eat meat for the first time

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More incredibly embarrassing, possibly criminal, news about our Commerce Secretary

European officials accuse Commerce Secretary Wilbur Ross of insider trading in a report on the 2011 Euro banking crisis. The report alleges Ross sold his stake in the Bank of Ireland at the top, knowing about accounting issues at the company. Ross hasn't been charged with any official complaint, as far as we know.  This continues a pattern of less than savory financial dealing from the Commerce Secretary.   In a report reviewing the worst excesses of the European banking crisis, Irish politicians are accusing US Commerce Secretary Wilbur Ross of insider trading. Mother Jones has the full report. The accusation is quite simple. Ross, through his investment firm WL Ross & Co., took a near 35% stake in the Bank of Ireland in 2011, during the depths of the crisis. In 2012, he joined the company's board of directors, but by 2014 he was selling his stake. He made 500 million euros ($682 million), selling his shares at 26 to 33 euro cents a share over a few months. Ross stepped down from WL Ross & Co. — which is currently being sued by former employees for fee gouging — when he joined the Trump administration.  That would all be fine if it weren't for the fact that it was later found that the Bank of Ireland was using deceptive accounting to make its balance sheet appear healthier than it was. Without that, Ross would not have been able to sell his shares at such a premium. This alleged deception was discovered in 2015, shortly after Ross sold his stake, and of course the bank's stock price suffered as a result. Ross, who as a board member, should have been familiar with the going-ons at the company, especially after doing due diligence and selling at the top.  And, if in the course of doing due diligence, he found out that there was something wrong with the bank's accounting, he had a duty to report that to shareholders. If he didn't, and he sold with that knowledge, as the report points out, that is a violation of insider trading laws. From the EU report (emphasis ours): "In 2011 Bank of Ireland admitted that it allowed US investor Wilbur Ross and other major funds to carry out due diligence on its assets Mr Ross therefore had access to the loss details that Bank of Ireland kept hidden from retail shareholders. Between 2011 and 2014 Mr Ross is reported to have made Euro 477 million from the purchase and sale of Bank of Ireland shares. Retail shareholders were denied this opportunity, which suggests that they were oppressed, or in plain English, the profit that Mr Ross accumulated was largely at their expense. Bank of Ireland confirmed that it offered the shares on preferential terms. It follows that Wilbur Ross would have seen details of the losses that Bank of Ireland failed to reveal... Mr Ross appears to have been aware of the flawed accounting model as used by Bank of Ireland. In January 2016, his name was mentioned in a court case. Ocwen, a US financial corporation was investigated by the Securities and Exchange Council. Like Bank of Ireland. it used a variant of the flaw in IAS 39 to hide losses. This led to shareholders being misinformed and suffering losses. Ocwen used the ‘amortised cost’ method of accounting to value certain distressed mortgages." By the way, Ross, who was on the board of Ocwen, settled an insider trading case related to accounting impropriety at that company without admitting wrongdoing. It is, of course, worth noting that Ross hasn't been charged with anything yet and it's not clear if European regulators will do anything at all. In the US, insider trading is also illegal but often settled without anyone admitting to a crime.  The Commerce Department has yet to respond to our request for comment. Are you not entertained? Ross is a funny little man. This year, it was revealed that he's been lying to Forbes for years in order to make himself look richer than he is so he could appear on the Forbes 400 list of richest people. He had to amend his claims of vast wealth (he's still rich, don't worry guys) when there was a large gap between the assets he reported to the government to become Commerce Secretary, and what he told Forbes. Why he lied is anyone's guess. Feelings of inadequacy are common on Wall Street, though when they're made public in such a spectacularly embarrassing fashion, everyone acts — at least publicly — as if its the first time they've heard of billionaire insecurity. Or, in the case, we should call it multi-millionaire insecurity. Then, there's that embarrassing matter of his ongoing business ties to Vladimir Putin's son in law, Russian billionaire Kirill Shamanov. This is all through a shipping company called Navigator, in which Ross owns a stake. It does business with Shibur, a Russian gas company partly owned by Shamanov. According to The Guardian, Navigator made $68 million off a deal with Shibur, starting in 2014. That, of course, was when the US put sanctions on Russia for its aggression in Ukraine. Some of Shibur's owners are sanctioned by the US government, though Shamanov is not. SEE ALSO: Commerce Secretary Wilbur Ross is low-key having the worst week ever Join the conversation about this story » NOW WATCH: How much money you need to save each day to become a millionaire by age 65

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A former top national security official says Venezuela is one of Trump's top 3 priorities alongside Iran and North Korea

President Donald Trump has focused much of his foreign-policy attention on Iran and North Korea. But Venezuela is reportedly a priority alongside those countries for Trump's national-security team. The Trump administration has already taken aggressive action against Venezuelan officials this year. Despite President Donald Trump's apparent overarching focus on Iran and North Korea during his first year in office, those countries apparently share their space at the top of the president's national security agenda. The president's National Security Council "has been told that Venezuela is one of Donald Trump's top three priorities. Iran and North Korea being the other two," Mark Feierstein, who was the National Security Council's senior director for the Western Hemisphere during the Obama administration, said during a panel discussion at the Americas Society/Council of the Americas in New York on Tuesday. Trump has struck a more aggressive posture toward Venezuela than his predecessor, sometimes to the detriment of the effort to build consensus against the government of Venezuelan President Nicolas Maduro. In August, Trump said the US had "many options for Venezuela, including a possible military option, if necessary." The remark was greeted with dismay in Latin America — as Maduro harped on it to rally support — and left US diplomats scrambling to allay concerns in the region. However, Feierstein said, administration staffers anticipated such a comment, though it was not clear in what form it would come. But, he added, referring to the military option, "that's not serious. That's not on the table." While many governments in Latin America and around the world have criticized the Maduro government, countries in the region haven't taken much action and EU measures have been limited. Venezuela's domestic political opposition has also made little headway — stymied by pressure from Maduro as well as by its own internal divisions. The Trump administration has a policy goal for Venezuela, according to Feierstein, but is split on how to pursue it. "What they're trying to achieve is pretty basic. It's a peaceful, democratic transition. They are at loss about how to achieve that, like the rest of us," he said. "But there is a division. The question is who 'they' is. There is division within the administration between the NSC and the State Department." "The NSC is not enthusiastic about the negotiations in Santo Domingo," Feierstein added, referring to negotiations between the Maduro government and opposition leaders taking place in the Dominican Republic. However, he said, the "State Department, at least at the most senior levels, is more supportive" of those talks. The Trump administration leveled several rounds of sanctions against dozens of Venezuelan officials in late July and early August, calling Maduro a "dictator" and directing sanctions against him specifically. Over the summer, officials within the State Department succeeded in reducing the severity of some of those sanctions, arguing that harsher measures would imperial ongoing dialogue between the government and opposition. However, those in the White House and on the National Security Council pushing for "strong and swift" action eventually won out — leading to broader financial sanctions against the Maduro government and Venezuela's state oil company, PDVSA. Those sanctions have complicated business dealings for PDVSA and others in Venezuela, but do not yet appear to have created fissures within the Maduro government. The Trump administration also stopped short of more drastic action like an embargo on Venezuelan oil, which many have said would worsen the situation in Venezuela — though at least one leader from the region has pushed for such a move.SEE ALSO: Nicolas Maduro is cracking down on rivals and Venezuela's oil industry could take a big hit Join the conversation about this story » NOW WATCH: Venezuela was Latin America’s richest country and now it is in complete crisis — here’s how it fell apart

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The brutal reviews for the GOP tax bill are piling up

Two new polls showed that the GOP tax bill is deeply unpopular, echoing other surveys. A USA Today/Suffolk University poll found that 32% of people approved of the bill, while 48% disapproved. A Marist University poll found that 52% of Americans think the bill will harm their personal finances, while just 30% of people thought it would help them. It's becoming clearer and clearer that Americans do not like the Republican tax bill that is making its way through Congress and could become law by Christmas. Two polls published in recent days reinforced the idea that the American public generally disapproves of the Tax Cuts and Jobs Act (TCJA) and doesn't think it would benefit their personal finances. A USA Today/Suffolk University poll, released Sunday, showed that only 32% of people surveyed approved of the TCJA, while 48% disapproved. Additionally, the poll found that 53% of Americans didn't think the tax legislation would lower their tax bills, while the same percentage did not think it would substantially boost the US economy. Another poll, from Marist University, found that 52% of people surveyed believed the TCJA would harm their personal finances. Thirty percent of respondents said it would help them financially, and 8% said it would make no difference. Americans are perhaps a little pessimistic on the possibility of a tax cut. According to the Joint Committee on Taxation, 38.3% of Americans would see a tax increase or a change in their taxes of less than $100 in 2019. By 2023, the percentage who would see an increase or little change in their taxes would increase to 44%. The Marist poll also found that 60% of those surveyed believed wealthier Americans would be the primary benefactors of the tax plan. Twenty-one percent of respondents said the middle class would come out the big winners. The Marist and Suffolk surveys follow similar polling that showed the bill is the least popular tax-related bill since at least 1980. Here's a rundown of recent polls on the tax bill: December 10, USA Today: 32% approve, 48% disapprove December 7, CBS News: 35% approve, 53% disapprove December 5, Gallup: 29% of Americans approve, 56% disapprove December 5, Quinnipiac: 29% approve, 53% disapproved SEE ALSO: Republicans are hurtling toward passing their massive tax plan — but it could still 'hit a serious snag' Join the conversation about this story » NOW WATCH: Everything we know about Trump's unhealthy diet

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World leaders think Trump's tax overhaul is dangerous, and they're getting ready to fight back

The finance ministers from the five-largest European economies sent a letter to Treasury Secretary Steven Mnuchin warning that the GOP tax bill could be negative for the world economy and violate international rules. Chinese officials are also preparing policy changes to try to mute the impact of the tax bill.  World leaders are preparing to confront the Republican tax bill, anticipating that some of its policy adjustments could harm their economies.  Officials in major European economies and China are readying themselves for policy responses that could counteract some the effects of the GOP's Tax Cuts and Jobs Act (TCJA). The finance ministers from five of the largest European economies — Britain, France, Germany, Italy, and Spain — sent a letter to US Treasury Secretary Steven Mnuchin on Monday warning that the TCJA could be detrimental to the global economy and "risk having a major distorting impact on international trade." "It is important that the US government's rights over domestic tax policy be exercised in a way that adheres with international obligations to which it has signed-up," said the letter, which was first reported by Reuters.. The finance ministers also charged that the TCJA runs afoul of World Trade Organization rules and could lead to legal challenges. The TCJA proposes a variety of adjustments to the US tax code that would change the way the US taxes multinational and foreign companies. For instance, the finance ministers say a proposed tax on foreign income of US-based corporations could unfairly target legitimate business relationships with European companies. In addition to the concerns from European officials, China is also preparing to counterpunch if and when the TCJA becomes law, according to Lingling Wei of The Wall Street Journal. Chinese officials refer to the GOP bill as a "gray rhino" and are preparing new rules to ensure the tax bill does not lead to large capital outflows from the country. Such changes could include tighter capital controls, higher interest rates, and more intervention to support the country's currency, according to the WSJ. A conference committee of both the House and Senate members has begun work to reconcile the two chambers' differing versions of the TCJA. In addition to merging the two versions of the bill, the conference committee will also have to resolve a series of unintended mistakes in the current versions.SEE ALSO: The Treasury released a bizarre one-page report on the GOP tax bill, and it's already getting shredded Join the conversation about this story » NOW WATCH: Fox News' Tucker Carlson — a registered Democrat — explains why he always votes for the most corrupt mayoral candidate

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No one used to call Oktas CEO before trying to squash his business now Amazon and Google give him a heads-up and that's progress

What does it feel like when all four of the largest cloud providers decide they want to compete with you? Okta Todd McKinnon says when you are tiny, they ignore you. When you are bigger, you get a courtesy call first. In some ways, the tech industry is like a small town, where everyone who's anyone knows each other and, sometimes, schemes behind each others' backs. Todd McKinnon, CEO of Okta and former head of engineering for Salesforce working directly for Salesforce CEO Marc Benioff, is one of the people in that "in" crowd. And, as the years have gone by, he's been on the receiving end of much scheming. The company that he cofounded, Okta, offers a cloud service that manages passwords and logins to other cloud services for corporate employees (known as "single sign on"). Okta had a successful IPO earlier this year and knocked it out of the park with its first quarterly earnings. Okta's Q1 revenue of $53 million was up 67% year-over-year, and above the $48 million expected by analysts. Okta now has nearly 4,000 customers and is winning big accounts, like Nordstrom's and its 60,000 employees. It turns out that kind of success has become irresistible for the big cloud companies. Years ago, when Okta was still small, Salesforce launched its own competitive service. Then Microsoft launched a competitor, and even went so far as to temporarily boot Okta from one of its big tech conferences. More recently, Google launched one, via an acquisition of a startup called Bitium in September. And last week. Amazon finally launched one as well. McKinnon has a humorous attitude toward all of this competition, he told Business Insider. First of all, he knows he's come up in the world by the way his new competitors are treating him. "You never like big guys coming into your market, but I feel like I’m making progress," he said. "If you go back to 2012, Salesforce enters the single sign-on market, no one calls me. Marc [Benioff] didn’t call me, didn’t give me heads up. He announced the product on stage." Flash forward another couple of years when Microsoft launched a competitor. McKinnon had known Microsoft CEO Satya Nadella for years, way before Nadella became CEO. Okta had turned heads when it was tiny because it was Andreeseen Horowitz's first cloud company investment, picked by the VC's namesake founder Ben Horowitz   "Satya had been to our office when we were 12 people. A year after that they entered the market and he doesn't call me," McKinnon said. "So I am proud because when Google bought Bitium recently, Diane Greene called me at least," he said. Greene is the head of Google's Cloud business. "And with Amazon, it wasn't Jeff [Bezos] and it wasn't Andy Jassy, but at least the Amazon partnership guys at Amazon called me and gave me a heads up before they announced the product," he chuckled.  But the news of Amazon entering the market was particularly scary because Okta's investors have for years asked him what's to stop Amazon from crushing Okta like a bug. He explained to them that cloud "identity management," which helps employees login from one cloud to the next, works well when it's an independent service and not part of one of the big guys' clouds. And that means, in addition to competing with the big dogs, Okta also partners with them. His customers still use Okta to sign on to Salesforce and Microsoft Office more than any other apps. They also use it to sign onto Google Apps and Amazon Web Services.  "Every investor assumes they [Amazon] are going to be in every market and they are going to be successful in every market, which is not true," he said. For those that don't believe him, he has two words "Fire phone," aka Amazon's failed smartphone product.SEE ALSO: An early Facebook exec explains why investing in startups without meeting them is the future of venture capital SEE ALSO: 50 startups that will boom in 2018, according to VCs Join the conversation about this story » NOW WATCH: Here’s why your jeans have that tiny front pocket

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SEC head Jay Clayton weighs in on cryptocurrency mania

SEC chairman Jay Clayton weighed in on the crypto-mania sweeping Wall Street in a statement Monday. Clayton warned investors about threats associated with cryptocurrencies and ICOs, a crypto-based fundraising method. Jay Clayton, the chairman of the US Securities and Exchange Committee, weighed in on the crypto-mania sweeping Wall Street in a statement Monday. "The world's social media platforms and financial markets are abuzz about cryptocurrencies and initial coin offerings," Clayton said. "There are tales of fortunes made and dreamed to be made." The market for cryptocurrencies has reached new heights in 2017, with bitcoin appreciating over $1,500% and gaining its own futures market. Initial coin offerings, a cryptocurrency-based twist on the initial public offering fundraising process, have raised more than $3 billion by some estimates. And Wall Street and Main Street are in a frenzy. But Clayton wants investors to take off the rose-tinted glasses and approach the highly unregulated space with great caution. He emphasized that not a single initial coin offering has registered with the SEC. Here's Clayton (emphasis his own): "Investors should understand that to date no initial coin offerings have been registered with the SEC.  The SEC also has not to date approved for listing and trading any exchange-traded products (such as ETFs) holding cryptocurrencies or other assets related to cryptocurrencies. If any person today tells you otherwise, be especially wary." Many companies have shied away from the ICO designation, opting instead for "utility ICO" or "token generation event" as to distance themselves from the regulated world of securities. Clayton said games with semantics won't fly with the SEC. "Many of these assertions appear to elevate form over substance," he said. "Merely calling a token a “utility” token or structuring it to provide some utility does not prevent the token from being a security." The international nature of cryptocurrencies can also pose a threat to investors, Clayton said: "Please also recognize that these markets span national borders and that significant trading may occur on systems and platforms outside the United States. Your invested funds may quickly travel overseas without your knowledge. As a result, risks can be amplified, including the risk that market regulators, such as the SEC, may not be able to effectively pursue bad actors or recover funds." Still, Clayton recognizes the revolutionary potential of cryptocurrencies and blockchain. "The technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative and efficiency enhancing," he said. "I am confident that developments in fintech will help facilitate capital formation and provide promising investment opportunities for institutional and Main Street investors alike." Read the full SEC statement here.SEE ALSO: The Winklevoss twins think bitcoin could 'go up another 20 times' and trounce gold Join the conversation about this story » NOW WATCH: The CIO of a crypto hedge fund explains the value in cryptocurrency — and why the market will explode over the next 2 years

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MORGAN STANLEY: 3 things could slow red-hot FAANG stocks in 2018

FAANG stocks could be a victim of their own success in 2018, says Morgan Stanley. The outperformance of the tech-focused group could leave it vulnerable to some trend reversals that could weigh on performance, according to the firm. All good things must come to an end. Which is why Morgan Stanley has already started brainstorming about what could derail torrid gains for scorching-hot tech stocks. The FAANG group — which consists of Facebook, Amazon, Apple, Netflix and Google — has crushed the broader market in 2017, buoyed by strong earnings growth and a momentum-chasing mindset from investors looking to buy stock in proven winners. And while Morgan Stanley isn't yet prepared to get outwardly bearish on FAANG heading into next year, it does note that there are some elements present that could slow the group's roll. They include: 1) A heavy concentration of broader market gains in FAANG FAANG has driven 24% of the benchmark S&P 500's gains in 2017, which is the third-highest level of concentration in the last 20 years, trailing only 1999 and 2004, according to Morgan Stanley data. Still, the firm notes that the average over the period is a 22% contribution from the market's top five stocks, so FAANG dominance isn't as overextended as it might appear on the surface. But it remains something to watch. 2) Growth stocks are beating their value counterparts — which could be due for a reversal Growth stocks have beaten their value-based peers for 10 years running after a six-year period where the opposite was true, according to Morgan Stanley. This trend could weaken or even see an outright reversal in 2018, the firm says. And that would impact FAANG because they're among the most notable examples of successful growth stocks. 3) Market outperformers tend to slow the following year Morgan Stanley finds that, throughout history, the top five market cap growers in a given year have only returned 3.7% over the following 12 months. What's more, those companies actually see a -0.6% median return, relative to the S&P 500. This fits in perfectly with Morgan Stanley's bullish-but-tempered outlook. These stocks may rise in 2018, but they'll be hard-pressed to keep pace with their outstanding 2017 gains.SEE ALSO: Big-money investors single out the biggest risk to markets over the next year Join the conversation about this story » NOW WATCH: We talked to the bond chief at the $6 trillion fund giant BlackRock about the most important issue for markets right now

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HP says nearly 500 laptop models have a dangerous bug that can record everything you type (HPQ, SYNA)

A dormant keylogger was discovered in nearly 500 HP laptop models. Keyloggers can record your keystrokes, posing a security and privacy threat to users. Hackers would need physical access to your computer to activate the keylogger. HP has issued a list of affected models, as well as software updates to fix the issue. A security researcher discovered a vulnerability in a common piece of software that comes installed on several laptop brands and models. This bug is in the Synaptics software that controls keyboard and trackpad inputs on 460 HP laptop models, including versions of the Pavilion, the EliteBook, and the ProBook. It's referred to as a "keylogger," which can record your keystrokes. A keylogger can be dangerous in the hands of a hacker, as it can record and send your keystrokes to potentially reveal sensitive information like passwords. Thankfully, the keylogger in the Synaptics software on HP laptops is disabled by default, and a hacker would need a laptop's administrative rights to enable it, meaning the hacker would need physical access to an affected laptop. "Neither Synaptics nor HP has access to customer data as a result of this issue," HP said on its support page. Still, it's worth covering all your bases. HP has issued a list of the affected laptop models, as well as software updates users can install to fix the bug. If you don't know your HP laptop's model, you can check for a sticker underneath the computer that might contain the model number. It was not immediately clear whether the bug was due to a flaw in the Synaptics software or to the way it was integrated into HP laptops. HP's support page about the situation says the bug can affect "all Synaptics OEM partners," which suggests that any laptop brand that uses Synaptics for keyboard and trackpad control may be affected. Synaptics shares were down 1.8%, at $38.22, in regular trading on Monday, while HP shares were up nearly 1%. Synaptics and HP did not immediately return requests for comment.SEE ALSO: I spent 2 hours with Samsung's insanely wide monitor — here's what it's like Join the conversation about this story » NOW WATCH: Here's the best way to clean your computer or laptop without damaging it

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TOP TECH ANALYST: Almost nothing will stop the FANGs in 2018 (FB, AAPL, NFLX, GOOGL)

Tech has outpaced the broader market by a wide margin in 2017. But it wasn't all smooth sailing, as many of the largest companies faced public and regulatory scrutiny along with company-level issues. Mark Mahaney, an analyst at RBC Capital Markets, told Markets Insider that he sees little risk to the future growth of the largest tech companies. Tech has been the fastest-growing sector this year, with the tech-heavy Nasdaq 100 nearly doubling the gains of the S&P 500. But tech has made its share of negative headlines this year. Facebook and Google have been facing investigations over their roles in allowing foreign influence in the 2016 presidential elections. Additionally, Apple has seen highly mixed results to its newest editions of the iPhone. As the EU cracks down on tax evasion and anticompetitive practices by tech companies in its member states, American lawmakers have started to ponder regulating or even breaking up some of the big tech companies. As the capabilities of AI programs skyrocket, and tech companies successfully automate more human jobs, anxiety over the future of work in the US seems to grow with the market cap of many of the tech giants. But is it all doom and gloom for some of the world's largest companies? With 2018 fast approaching, Markets Insider sat down RBC's Mark Mahaney to find out what could be in store for the tech sector next year. Mahaney is one of the most widely respected analysts in the tech space and is rated in the top five analysts by Bloomberg for 14 of the 25 stocks he covers. Following is transcript of a phone interview with Mahaney. It has been edited for clarity. Seth Archer: Going into 2018, what are you looking out for, what gets you excited, and what are you worried about? Mark Mahaney: Three things have remained constant about the large-cap internet stocks, at least the high-quality ones. One of these facts is that revenue growth is extraordinarily consistent. The expression we use is 'insanely consistent' in our last earnings preview. Google, Amazon, Facebook, Netflix — all four of the FANGs — have had almost the exact same growth rate in '17, '16 and '15. Facebook has faded a little bit, but it's faded from, like, 60 down to high 40. I've been struck by how consistent the growth rates have been. I've also been struck by how consistent the aggressive investment has been by these companies. All these companies have been spending aggressively on new areas of growth: whether it's Netflix spending more money on original content and expanding internationally, whether its Amazon spending more money on buying Whole Foods and on distribution centers for its retail business and data centers for its cloud business, whether it's Facebook investing aggressively into artificial intelligence and machine learning and into video content. And Google is still aggressively investing in cloud — also into its projects like autonomous vehicles. The investment outlook remains aggressive for all four of those companies, and the revenue growth has remained very consistent. And the third thing that is constant is really the multiples. The valuations on these names are very similar to where they were two years ago. The multiples have either held or have come down. It’s interesting: They've had three years in a row of dramatic market outperformance. It's not been due to a multiple rerating. That would typically be it, you'd expect. It's been entirely been due to earnings growth. The stocks have gone up because the earnings have gone up, and the earnings have gone up because the revenue growth has been consistent. So those are the three constants. As I think about '18, I don't see a reason why the fundamental trends behind the leading internet platforms, so I call them "PEFANG": Priceline, Expedia, FANG. I don't think there is any reason — except for the online travel names — I don't think there is any reason to expect a change, either a material change in their revenue growth or in their aggressive investment outlook. And the multiples. It’s sort of interesting. I feel less conviction about the multiples than I do about the fundamentals of the company. Because I feel like the fundamentals are extremely intact, and since multiples have been very consistent the last three years, I don't know why they wouldn't be this year. But as a stock picker, I would worry about if there's a rotation out of growth into value. Then, clearly, no matter how high quality they are, the internet names would underperform if there's a material rotation out of growth into value. Archer: So you are worried about multiples going down, not them going higher right? Mahaney: Yeah, I guess that's right. I don't think that given where the multiples are, I don't know that there's room for a lot of correction in the multiples. But I could see the multiples go down by a couple of points on each of the names as a part of the trade rotation out of growth and into value. That's a risk that I would think about. I think the high-quality internet names, they probably face portfolio risk. I don't foresee any particular macro risk and I don't see any particular fundamentals risk. You know, famous last words — but they've been very consistent the last three years. Archer: You mentioned government regulations. Does that come to a head in 2018, and how does that affect earnings? Mahaney: I don't know if it comes to a head, but there's no doubt that there is greater regulatory scrutiny of these names. OK, maybe not Netflix — but Google, Amazon and Facebook. There's no doubt that there's greater public and regulatory scrutiny now than there was 12 and 24 months ago. And it's not only that, but there's been actual, regulatory action taken against Google in the EU. And there are two more investigations that the EU is undergoing. I'm skeptical that the regulatory public scrutiny will lead to either a material change in their revenue growth outlooks or in their cost structures. But the latter is a possibility. It's possible that they are going to have to spend more money to comply with regulations. Whether that's data-privacy regulations like those that are going to be imposed by the EU in 2018, that could lead to a rise in their cost structure. I don't think it would be material, but it's possible. Facebook — one of the reasons they are going to be accelerating their expense growth in '18 is the need to spend more on security because of the Russian hacking of the US elections. So that's an odd expense. I don't know if that really falls under scrutiny, except that it was public scrutiny that made Facebook get more aggressive about it. I guess that's probably the biggest variable I can think of. Does regulatory and public scrutiny cause their operating costs to rise more aggressively than they would otherwise? That, to me, is one of the most interesting changes. A couple of other trends I find interesting in the group are the increasing focus on AI and machine learning. It's very hard to see that impact from a financial perspective; it's hard to find their line in the P&L that says this is artificial intelligence, but it's in there in terms of the expenses. And it should be in there in the form of more relevant and more effective services. I guess that's point one. The stocks have gone up because the earnings have gone up, and the earnings have gone up because the revenue growth has been consistent. Point two is, I'm very intrigued by what I call the "voiceification" of the internet. It's not only in emerging markets. I'm not certain on this, that voice is much more of a user interface, an application-interaction method than in the developing markets. And more and more of the growth of the internet is in developing markets. In the US, that will essentially carry the internet, or bring the internet into the car and the kitchen. I'm thinking about Alexa devices, Google Home devices, the HomePod, by Apple, whenever that comes out. So I think about that. It's not the most important platform shift of the last five years or next five years. It's still going to be smartphones. But voiceification could also move the needle — not exactly as smartphones did, but it will move the needle. Archer: And does AI move that needle? You said it's hard to see. Mahaney: Yes, it must. It's one of those "submarine trends." It's impacting the tides, but it’s below the surface, so it's very hard to see it. Read more about how tech is in the crosshairs of regulators here.SEE ALSO: RBC: Google is in the ‘crosshairs’ of antitrust regulators — and should be kicked out of FANG Join the conversation about this story » NOW WATCH: The stock market is flashing warning signs

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CITI: A pattern is popping up in the euro that suggests it could soar 20%

The euro is on track to post its biggest annual gain since 2003. An "outside year" could occur for just the third time since floating exchange rates began in the 1970s. The CitiFX Technicals team says the euro could hit 1.30 against the dollar in 2018 if that occurs.   The euro is poised to end its three-year losing streak in 2017, with a gain of 10.88% against the dollar so far, according to Markets Insider data. While that would account for the single currency's biggest annual gain since 2003, it could just be the beginning of a big move higher, according to the CitiFX Technicals team led by Tom Fitzpatrick. The team is paying close attention to where the euro finishes this year. Specifically, they're watching 1.1616, as a close above there would make for an "outside year." That means the euro would end 2017 above the previous year's high after trading below the previous year's low. Take a look at their chart below: An outside year would be rare, according to Fitzpatrick's team, as it has only occurred three times since floating exchange rates began in the 1970s. "All three have seen moves in the same direction as the reversal in the following year," Citi wrote. "On average the move the following year has been over 20%."  So where will the euro go from here? "The smallest move in the year following such a reversal was seen after the 2014 bearish outside year that yielded a 13.5% fall in 2015," Fitzpatrick's team concluded. "That move also started with a bearish outside month first (in May). If replicated that would suggest a real danger of a move above 1.30 in 2018." And Citi isn't alone in its call for the euro hitting 1.30 against the US dollar. BNP Paribas FX Strategist Sam Lynton-Brown also has that price target for the single currency, except he expects that level to be reached by the end of 2019.  "A reduction of expectations of US rate hikes and an earlier than anticipated move by other G10 central banks towards tighter monetary policy have caused us to bring forward our expectation of USD weakness," he wrote in a July note.  He points to the European Central Bank moving away from its very accommodative policy, which in turn causes investors to "begin to unwind or hedge their large holdings of foreign debt securities," providing support to the euro. SEE ALSO: Bitcoin and tulipmania have a lot more in common than you might think Join the conversation about this story » NOW WATCH: A senior investment officer at a $695 billion firm breaks down tax reform

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The Winklevoss twins think bitcoin could 'go up another 20 times' and trounce gold

The Winklevoss twins think bitcoin could appreciate 20 times and trounce gold. Others say the cryptocurrency is in a bubble.   Traders in the new bitcoin futures market appear bullish on the red-hot coin. Contracts for the January futures contract on Cboe Global Markets were trading well-above the spot market for bitcoin, at over $17,500 a coin on Monday. But most traders are nowhere near as bullish as the Winklevoss twins. Tyler and Cameron Winklevoss, whose bitcoin holdings are worth more than $1 billion, told Fox Business Monday the coin could reach well above $300,000 a coin. “Today it’s about a $300 billion market cap, gold is at $6 trillion, so we think it could very well go up another 20 times from today," Cameron Winklevoss said. Bitcoin, he said, could ultimately trounce its earthly rival. “We think it’s definitely realistic that it could grow and disrupt gold and maybe even beyond that,” Winklevoss said. Bitcoin, which gained 1,500% so far this year, was trading up 8.9% at $16,407% on Monday afternoon. The coin, which is known for its spine-tingling volatility, has traded higher since Cboe's launch of bitcoin futures. The exchange operator is partnered with Gemini, the cryptocurrency exchange founded by the Winklevoss twins, for the new market.  Still, that hasn't kept naysayers quiet. Some of the most well-respect analysts and economists on Wall Street have said bitcoin is a bubble. In fact, in a note sent out to clients on Monday, UBS Global Chief Economist Paul Donovan referred to bitcoin as the "bubble to end all bubbles." Here's Donovan: "Cryptocurrencies only have value if accepted as currencies. However, they cannot be used for the most important transaction in an economy, and cryptocurrency supply can only rise and never fall (making them a poor store of value). To date, using cryptocurrencies requires (effectively) a simultaneous asset sale and purchase of goods or services." SEE ALSO: Bitcoin bull Tom Lee has identified 12 stocks that are perfect if you don’t want to own it Join the conversation about this story » NOW WATCH: This is one of the best responses to Jamie Dimon calling bitcoin a fraud that we have heard so far

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Coinbase's cryptocurrency exchange crashes briefly

The Global Digital Asset Exchange, the cryptocurrency exchange run by Coinbase, was down briefly Monday afternoon. The exchanged resumed trading at 2:57 p.m. ET.    Coinbase, the US-based cryptocurrency trading platform, saw its Global Digital Asset Exchange crash for a brief time Monday afternoon. The exchange stopped executing trades for clients at around 2:50 p.m. ET, according to an alert on its website, citing issues relating to their application programming interface, the technology that communicates information between computers. "All markets are now in post-only mode and we are preparing to re-enable trading," the company said. "New maker orders will be accepted, but no matches will occur."  The company had things back up and running by 2:57 p.m. ET. This isn't the first time Coinbase has experienced issues during periods of high volume. When bitcoin soared over $11,000 per coin in November, Coinbase experienced a "partial system outage," during which time many users found themselves locked out of their accounts. It also experienced issues during a wild-trading session Thursday. Cryptocurrency exchanges, which don't have the industrial infrastructure of traditional exchanges such as the New York Stock Exchange or the Nasdaq, are under pressure to handle record-trading volumes. As such, they are building out their infrastructure and hiring more developers. Here's Coinbase CEO Brian Armstrong on his company's expansion: "Over the course of this year we have invested significant resources to increase trading capacity on our platform and maintain availability of our service. We have increased the size of our support team by 640% and launched phone support in September. We have also invested heavily in our infrastructure and have increased the number of transactions we are processing during peak hours by over 40x." Still, Monday's crash occurred during a relatively calm trading session for bitcoin. Volumes for bitcoin were nearly half of what they were during the previous outage, according to data from CoinMarketCap.SEE ALSO: Bitcoin just hit an all-time high — here's how you buy and sell it Join the conversation about this story » NOW WATCH: Warren Buffett lives in a modest house that's worth .001% of his total wealth — here's what it looks like

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Litecoin is surging after Bitcoin futures launch

Litecoin, the fifth-largest cryptocurrency by market cap, has gained more than 25% in value over the last 24 hours, reaching an intra-day high of $195.66 per coin. The gains come the day after Cboe Global Markets, a a Chicago-based exchange operator, launched trading of Bitcoin futures contracts. Litecoin initially saw a hefty loss after Coinbase’s GDAX exchange crashed last week, briefly sagging below the $100 mark before this week’s skyrocket in price. Litecoin uses a slightly different mining technique than bitcoin, but has been largely left out of the cryptocurrency explosion. While the cryptocurrency has seen its value skyrocket by 4,975% this year, it’s still trading at just $187 per coin, compared to bitcoin’s $17,006. For comparison's sake, bitcoin is up 2,062% in the last 12 months. The electricity used to mine bitcoin this year is bigger than the annual usage of 159 countries, a British research firm recently estimated. SEE ALSO: WALKTHROUGH: How traders 'pump and dump' cryptocurrencies Join the conversation about this story » NOW WATCH: This is why you should be buying gold

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Tesla is rising after reports it has started to deliver the Model 3 to regular customers (TSLA)

Tesla has been seen stocking up on the new Model 3 at its stores and delivery centers. Tesla has been plagued by production issues for the Model 3 recently and is working to overcome them. Watch Tesla's stock move in real time here. Tesla is up 3.88% to $327.29 on Monday after reports that the company is starting to deliver its Model 3 to regular customers. Electric car blog, Electrek, is reporting that Tesla is starting to deliver cars to customers that aren't employees or company insiders. Electrek is also reporting that Tesla has been stocking its stores and delivery centers around Los Angeles with Model 3s, and posted a video showing more than 100 Model 3s at the company's Fremont delivery center. Deliveries and full parking lots do not necessarily mean the company has overcome the production bottlenecks that have plagued the Model 3 thus far, but it is a good sign. The Model 3 has a preorder list of about 450,000 customers, while Tesla only produced 260 of the vehicles in the third quarter. Panasonic, Tesla's major battery production partner, said the bottleneck had to do with the assembly of the Model 3's battery. At the end of October, Panasonic's CEO said the problems have been solved, and production would "rise sharply." The company is working toward its revised goal of producing 1,500 Model 3s per week by the end of the first quarter, which was originally its goal for 2017. Tesla is up 52.6% this year. Read more about the company's production bottlenecks here. SEE ALSO: Tesla jumps more than 3% after reportedly solving its Model 3 bottleneck Join the conversation about this story » NOW WATCH: The Fed is trying to prepare for the next recession without causing it

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Bitcoin hits all time high above $17,300 after bitcoin futures premiere

The price of bitcoin, the red-hot digital currency, topped its previous all-time high set Friday, according to data from Markets Insider. Bitcoin was trading up more than 14% against the US dollar on Monday at a record $17,346, less than a day after the launch of Cboe's bitcoin futures market. The price picked up just after Coinbase's cryptocurrency exchange, GDAX, went back online after a very brief crash. Bitcoin is up more than 1,500% year-to-date. Story is developing check back for updates.SEE ALSO: Coinbase's cryptocurrency exchange crashes briefly Join the conversation about this story » NOW WATCH: One type of ETF is taking over the market

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STOCKS HIT A RECORD HIGH: Here's what you need to know

US stocks climbed to a record high ahead of a Federal Reserve meeting on Wednesday, where the central bank is expected to announce a 25-basis-point rate hike. The S&P 500 gained 0.2%, while the Dow Jones Industrial Average added 0.2% and the more tech-heavy Nasdaq Composite index rose 0.4%. First up, the scoreboard: Dow: 24,358.65, +29.49, (+0.12%) S&P 500: 2,659.54, +8.08, (+0.31%) Nasdaq: 6,875.04, +35.25, (+0.50%) US 10-year yield: 2.39%, +0.002 WTI crude oil: $57.95, +$0.59, +1.03% 1. Bitcoin soars after futures launch. The contracts, which allow investors to bet on the future price of hte red-hot virtual currency, debuted Sunday night at about $16,000, a premium over the price of bitcoin in the underlying spot market. 2. Morgan Stanley laid out 3 things that could slow red-hot FAANG stocks in 2018. While the firm isn't bearish on the group heading into next year, it does say that its massive outperformance could slow. 3. Bitcoin bull Tom Lee has identified 12 stocks that are perfect if you don’t want to own the cryptocurrency. The basket of 12 stocks has gained 136%, which has beaten the S&P 500 but is dwarfed by bitcoin's rise. 4. Citigroup says a pattern is popping up in the euro that suggests it could soar 20%. The firm is closely watching the level at 1.1616 versus the US dollar. 5. Big-money investors singled out the biggest risk to markets over the next year. They're most scared of a geopolitical shock, according to a survey conducted by Barclays. ADDITIONALLY: Only one thing matters at the next Fed meeting Litecoin is surging after Bitcoin futures launch Tesla is rising after reports it has started to deliver the Model 3 to regular customers The Winklevoss twins think bitcoin could 'go up another 20 times' and trounce gold TOP TECH ANALYST: Almost nothing will stop the FANGs in 2018 HP says nearly 500 laptop models have a dangerous bug that can record everything you type Take a closer look at Ford's F-series pickup trucks — the most popular vehicles in the USSEE ALSO: Big-money investors single out the biggest risk to markets over the next year Join the conversation about this story » NOW WATCH: We talked to the bond chief at the $6 trillion fund giant BlackRock about the most important issue for markets right now

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Bitcoin futures launch sends bitcoin up $1,000

Bitcoin futures went live on Cboe Global Markets, the Chicago-exchange group, Sunday night. Liquidity on the market was thin and Cboe's website crashed. The price of bitcoin soared by more than $1,000 after the market went live. Bitcoin futures went live on Cboe Global Markets, the Chicago-based exchange group, Sunday evening and the price of the red-hot coin shot up. Cboe's future contracts, which trade under the ticker XBT, allow investors to bet on the future price of bitcoin. Bitcoin shot up over $1,000 after investors could start purchasing contracts at 6:00 p.m. ET. According to data from CoinDesk, bitcoin soared from $14,509 a coin at 5:59 p.m. ET to $15,704 at 6:07 p.m. It gave up some of those gains and was trading at $15,178 at 6:11 p.m. The futures contracts were trading at $16,000 soon after the market went live, higher than where bitcoin was trading in the spot market at the time of print. Trading in the early stages was muted. Only 800 contracts traded within the first two hours of the market being live, according to Cboe. Still, volumes impressed one trader. "There was more volume than I was expecting," Garrett See, the CEO of DV Chain, the cryptocurrency trading division of Chicago-based DV Trading, told Business Insider. "It was difficult for folks to get access to this market on day one since only some brokers were clearing trades for clients," he added. JPMorgan and Citigroup, which are two of the largest futures brokers, did not participate in the market Sunday. Nor did Societe Generale. Goldman Sachs said it would clear futures for some clients. Interest in the new market appeared to put pressure on Cboe. Its website experienced outages soon after trading of bitcoin futures was underway. Here's Cboe in a tweet: "Due to heavy traffic on our website, visitors to http://www.cboe.com  may find that it is performing slower than usual and may at times be temporarily unavailable. All trading systems are operating normally." "The launch is going as expected sans [Cboe's website] crashing," John Spallanzani, chief macro strategist of GFI Group, told Business Insider. "It speaks to the interest in bitcoin. There hasn't been this much interest in something since the internet boom." Bitcoin futures are the latest evolution in the market surrounding the cryptocurrency, which has appreciated more than 1,400% this year. Two other exchange operators are also set to launch their own bitcoin futures contracts. There are a number of reasons why bitcoin futures products are a big deal for Wall Street and the world of crypto. First, the launch of bitcoin futures by establishment firms is likely to to open the door to wider participation in bitcoin trading by other Wall Street firms. It could also pave the wave for an exchange-traded fund, which could bring more investments into the space. Most importantly, it could help dampen bitcoin's spine-tingling volatility. The first bitcoin futures depend on trading at the Winklevoss twins' tiny exchange — and that's a problem Join the conversation about this story » NOW WATCH: A self-made millionaire describes the financial mistakes to avoid if you want to get rich by 30

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Indies 'The Disaster Artist' and 'I, Tonya' shine as the box office prepares for 'The Last Jedi'

With Hollywood studios bracing for "Star Wars: The Last Jedi" opening next weekend, independent films are benefiting at the box office. "I, Tonya" had an impressive opening weekend. Movies like "The Disaster Artist" and "Lady Bird" continue to preform well as they expand to more theaters. Another week passes, and it's another one where "Coco" tops the domestic box office. With its estimated $19 million take over the weekend, according to The Wrap, that makes three straight weekends the latest Disney/Pixar title has been No. 1. Why has it been such an easy road to dominance? Because all the other studios are taking a breath until another Disney title, "Star Wars: The Last Jedi," comes in and takes the torch from "Coco" and dominates the box office (likely for the rest of 2017). As the studios see it, why release one of their big titles these past two weekends and spend millions on marketing when it's likely just going to suffer the buzz saw that is a new "Star Wars" movie? That's allowed independent movies to sneak in and attract audiences. It's a perfect time as many are hoping to get recognition on Monday morning when Golden Globes nominations are announced, which will only lead to more interest in the weeks to come. Neon's "I, Tonya," an unconventionally told biopic focused on the life of infamous figure skater Tonya Harding, opened on four screens this weekend and scored an impressive $245,000. That's a $61,000 per-screen average. With the movie's star Tonya Harding likely to get a Golden Globes nomination (and maybe even an Oscar), Neon has a title that more and more audiences will check out as the film expands its release in the weeks to come. Same with Fox Searchlight's "The Shape of Water." Guillermo del Toro's unique love story was on 41 screens this weekend and earned $1.1 million (a $26,000 per-screen average). It was only on two screens last weekend. And A24 had two titles crack the top 10 this weekend. "The Disaster Artist" went from 19 screens last weekend to 840(!) this weekend, and it proved to be the right move. James Franco's funny and touching behind-the-scenes look at the making of "The Room," regarded as one of the worst movies ever made, took in $6.4 million to take fourth place. "The Disaster Artist" came in second behind "Coco" in the Friday estimates, earning $2.6 million ("Coco" made $4.3 million). The movie was made for $10 million. And Greta Gerwig's "Lady Bird" came in ninth place with $3.5 million  ($22 million lifetime total) and continues to be one of the feel good titles of the holiday season. The movie is now in over 1,500 theaters. This is another title that will only see its box office numbers increase with likely Golden Globes and other major award nominations to follow. Studio titles took home second and third place this weekend, with "Justice League" and "Wonder," respectively. "Justice League" took in $9.6 million, putting its domestic total to $212 million. "Wonder" continues to be the little engine that could, earning $8.5 million to put its total over $100 million. Hollywood is desperate for a home run at the box office, and that will come next weekend with the release of "The Last Jedi." The only question is: How high will that opening number be?SEE ALSO: After burning out writing blockbuster rom-coms, this screenwriter reinvented himself by tracking down infamous figure skater Tonya Harding DON'T MISS: 'The Disaster Artist' is the most fun you'll have at the movies this year, and James Franco should get Oscar attention Join the conversation about this story » NOW WATCH: 10 things you missed in the 'Avengers: Infinity War' trailer

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BANK OF AMERICA: The dollar is set for a big rebound after a difficult year

The dollar has fallen 8% this year against a basket of other G10 currencies.  But it's poised for a rebound in 2018 if the GOP tax plan passes, according to Bank of America Merrill Lynch. Right now, the market is pricing in "almost nothing" on taxes.  Tax cuts would lift economic growth, prompting the Federal Reserve to raise rates faster than it expects, the firm's FX strategists said.    2017 has not been the dollar's greatest year.  Against a basket of G10 currencies, the greenback has lost 8% this year. Even the prospect of tax cuts hasn't made the dollar more attractive to currency traders.  "It seems to us that the consensus is that the tax reform will not matter much, which is consistent with what our survey data and the feedback during our recent client meetings suggest," said Athanasios Vamvakidis, the global head of G10 FX Strategy at Bank America Merrill Lynch, in a note on Friday. "In contrast, we have been arguing that the US tax reform is a big deal and will support the USD in early 2018." That the dollar has not gained since the Senate passed its version of the Tax Cuts and Jobs Act last weekend shows "the market seems to be pricing almost nothing," he added. Vamvakidis sees traders buying the dollar on tax reform after selling the "rumor," or the period when uncertainty about its passage weighed on traders. The Senate passed its version of the Tax Cuts and Jobs Act in the wee hours of Saturday morning. It's now set to resolve the differences between its bill and the House version that passed in mid-November. The tax-cut boost to the dollar would take three forms, Vamvakidis said. Companies would be encouraged to repatriate funds they've left overseas for tax reasons, and some of these would be converted to dollars and used for capital expenditure. Tax cuts could boost annual gross domestic product growth by 0.3 to 0.4 percentage points over the next two years. And this could force the Federal Reserve to raise interest rates faster than it expects. As for a specific recommendation, BAML says buying the dollar against the Swiss franc is a great way to position for repatriation.  BAML's David Woo said in 2005, the last time companies got a tax break on overseas earnings, the franc was the second-worst performing currency against the dollar among G10 currencies given the outflows by foreigners. Switzerland contributed to 10% of total repatriated cash dividends by companies, second to Netherlands, Woo said in a recent note.  'A difficult year' "It was a difficult year for people like me and people who try to make a living trading or investing in foreign exchange," said Daniel Katzive, the head of North America FX strategy at BNP Paribas, at a media briefing on Thursday.  Many investors did not expect the dollar to weaken in an environment where the Federal Reserve raises interest rates thrice, stocks surged, and tax cuts moved closer to becoming law. But as the dollar rose from 2014 through 2016,  it got expensive compared to most G10 currencies, Katzive said, especially those with low yields like the Swedish krona and the Norwegian krone.  Like Vamvakidis, Katzive also forecasts a rally in the dollar, although this may only prevail through the middle of 2018.  "We'd be getting closer to the ECB pulling the trigger on rate hikes and other G10 central banks tightening policy," Katzive said. The "writing will be on the wall for the dollar versus these currencies where it's very expensive. We think we'll see a lot of investor hedging of dollar exposure begin to really pick up by the middle of next year."  SEE ALSO: Bank of America has come up with the 'ultimate tax reform trade' that everyone is missing Join the conversation about this story » NOW WATCH: This is why you should be buying gold

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BlackRock's $1.7 trillion bond chief explains the key dynamic every investor needs to understand

Rick Rieder, who oversees $1.7 trillion as the global chief investment officer of fixed income at BlackRock, says the growth of technology is the most important dynamic in markets. In a wide-ranging discussion, Rieder also discussed the Federal Reserve's next steps, the GOP tax plan, the equity and bond markets, and the rise of exchange-traded funds. With even the most cursory look at the business landscape, it's clear that technology is pervading everything around us — the places we shop, the products and services we pay for, even the way we think about the world. Just look at Amazon's using its foundation as an e-commerce juggernaut to disrupt industries far and wide. Tesla, with its $52 billion market cap, is more valuable than Ford in the eyes of investors. And Apple's iPhone has for years been the primary mode of communication for many of us. Rick Rieder, the global chief investment officer of fixed income at BlackRock, is closely watching technology's effects on the economy and global marketplace. Responsible for overseeing $1.7 trillion, he's a keen observer of how trends like this are developing. To him, it's all part of the grand puzzle of how markets and the economy fit together — and understanding the big picture is crucial to his success as an investor. In an interview with Business Insider, Rieder broke down how technology is transforming the economy and explained how the market is underestimating its impact. He also shared his thoughts on the Federal Reserve's next steps, the GOP tax plan, the equity and bond markets, and the rise of exchange-traded funds. It was part of a wide-ranging discussion that also included a deep dive into Rieder's hectic daily schedule, which you can read about here. This interview has been edited for clarity and length. Joe Ciolli: You've written in the past about the adoption of technology and how it's affecting the market. What's your view on the role of technology? Rick Rieder: By far the most important dynamic today across all markets is how quickly technology is changing the world we live in and invest in. I think people are underestimating how quickly technology is changing commerce in particular, and you're seeing extraordinary dispersion happening in credit as a result. Having said that, I'm convinced the economy is going to keep growing. But if you look at the components of inflation, services versus goods, there are tremendous differences. When the price of goods drops, consumption of those goods grows, particularly since lower- and middle-income consumers tend to consume more goods than services. So when prices come down, quantities grow as a result. When people say the system is stagnating because inflation isn't growing at 2%, that's not true. Prices are dropping so far and so fast for so many consumption items — like apparel, audio and video equipment, transportation services, and more — that the quantity of goods is actually growing precipitously, just at a lower price point than anyone's ever seen before. Ciolli: Are there any specific industries you'd like to highlight? Rieder: Look at motor vehicle sales, which have generally been pretty stable and pretty good. But then you get new ride-sharing technologies that come in which bring down the cost of transportation. Just look at rental-car companies' stock prices — they then sell their fleet, so CPI trends for new and used cars are affected. People don't consider the secondary or tertiary effects of technology. Or take Tesla, for example; they announce a car that's $27,500 after the tax subsidy and all of a sudden you have to deflate the whole automobile industry. And what's happened now with regard to food and restaurants, the whole dynamic is being changed. It used to be that you had a brand that sold through an outlet. If you walked into your local retailer, you knew they'd carry a well-known national brand. Now word of mouth is shifting the way commerce works, in that you don't need to have the brand anymore because it's evaluated online. The whole world of commerce is changing. Ciolli: You're a member of the Federal Reserve Bank of New York's investment advisory committee for financial markets. What's your outlook for what's next for the Fed? Rieder: We've been pretty adamant about the Fed raising rates in December and then three times next year. But the industry now thinks that the Fed is going to go four or five times next year, which is interesting because not too much happened in the past month, since the tax bill was already moving in a positive direction. This is the first time in three years where I'm more dovish than the market on how much the Fed will move in the next year, but I do think the markets, the economy, and inflation will all give them the avenue to move. Inflation is accelerating, and I think people are underestimating the nominal growth potential for 2018. It's possible that we could get 5% nominal GDP next year, allowing the Fed to move but not requiring a dramatic need to brake the economy or inflation. Ciolli: Many people have identified uncertainty around the Fed's balance-sheet unwind as a major source of risk. Do you agree with that? Rieder: The one thing a central bank is not supposed to be is the instigator of volatility, and they won't be. Central banks are maniacally focused on not being an instigant to disrupt markets. As for the changing leadership at the Fed, the Federal Reserve chair tends to act differently than an elected official. They tend to continue the path laid out by the predecessor, while an elected official oftentimes tries to shift gears. Also, when the Fed tightens it's different than easing, in the sense that it can be behind the curve. You want to make sure growth is still durable when you're tightening, which is very different than the easing process, where you want to be fast and ahead of the economy. I think they'll be deliberate in what they do from here. Ciolli: What are your thoughts on tax reform? Rieder: Before, it made a lot of sense for companies to just use excess cash flow to buy back stock. You weren't getting any benefit from capital expenditure, and your cost of debt was extremely low. But now you have a direct expense benefit in the tax bill potentially, and global growth is going to continue to be good, so it makes more sense to invest in capex. That's huge, and it's just not factored in today in terms of the potential impact. When you take your corporate tax rate to 20%, it will create a 20-25% EPS benefit for some companies or industries permanently. That has such huge ramifications for how companies look at their businesses going forward, and how they look at risk. I'm a big believer that when you create this velocity in the system, where companies are able to spend on capex and hiring, it will pull forward growth — meaning we potentially could be in a recession by late 2019 into 2020, but it's not a 2018 story. I wouldn't argue with that, particularly since some growth will get pulled forward. With all of these potential tail risks for doing capex today, I don't see how you can go to your board of directors and say you're just going to buy back your stock in 2018. Ciolli: There are bull markets currently raging for both stocks and bonds. As someone with a fixed-income focus, what do you think could derail the bond bull market? Rieder: I think both the equity and bond markets are right in what they are telling us about important fundamental and technical drivers. There's a demographic that we've never seen before: an aging population that's created this dynamic of needing more income, particularly for insurance companies and pension funds that are growing as a derivative of an aging population. There aren't enough assets or cash flow in the world relative to that demand. The long end of the bond market can stay very low for a very long time because of this extraordinary demand. I think rates are going to move higher, but it'll be a deliberate process. If you asked me where we'd be six months from now, I think the 10-year will be 2.75%, which is still pretty low in a historical context. Because there's not enough income in the bond market, money is going to keep flowing into the equity market, pushing it higher, because that is where you can access decent cash flows today. There just aren't enough assets relative to income requirements in the world today. By any measure we use, the 10-year Treasury yield is between 50 to 75 basis points too low, but it's because there's a shortage of assets. That demand is also much of why volatility is so low. Ciolli: We saw the high-yield-bond market hit a rough patch recently. What's your view on that? Rieder: This recent high-yield skirmish was a result of valuations being high, as with some other parts of the fixed-income market. I think the high-yield market got to a very aggressive valuation point in the US and Europe, and then you got some adverse news around some specific sectors. That was a pretty good wake-up call, and it showed that the markets still hold a good amount of risk. With all of that said, I'm not worried about a dangerous credit-cycle unwind at all. Yet we're going to have more volatility in 2018 no matter what. When central banks pull back on the "put" they've implicitly had in the market, markets will consequently move more on organic economic conditions, which is almost by definition more volatile. Ciolli: Do you think that these sorts of setbacks are ultimately positive for the market? Rieder: Artificially distorted markets are super dangerous. There's a real rhythm to markets, where historically every four years you'd get a market disruption — like in 1990, 1994, 1998, and 2002. And that creates a dynamic where markets reprice and then assets can do well for the next three years. We should've theoretically recalibrated in '06. The fact that we didn't meant that '08 was a bigger problem. Now we're in '17, and assets are being distorted longer. It's really dangerous. Markets have to recalibrate and reprice. A VIX at 9 is wrong. A VIX at 30 is wrong too. But we should really be operating between 13 and 22. And the longer you operate outside of that, the worse it ends up being. It's like going to the dentist — you've just got to do it, and the longer you don't, the worse it ends up being. I don't think equities are mispriced. As a matter of fact, I think they're going to keep going higher, but parts of the debt market are too high, which can be a leading indicator or ultimately the cause in a cause-and-effect world. Ciolli: Active managers often blame ETFs for sapping the market of volatility. What do you make of the role ETFs play? Rieder: Passive investing has definitely made some contribution to low volatility, full stop. I wouldn't argue with that at all. But quantitative easing has also reduced volatility in financial systems — that's the No. 1 influence that QE has on the economy and financial markets, I would argue. That's because of the assumption that central banks will keep going until they solve the problem. And when you come off of that persistent monetary stimulus, volatility grows. But I think there's something even more important than that, and it's the volatility of inflation. In the '70s and '80s, you had a baby boom and housing inflation, and you had some energy inflation. Then in the last 20 years, particularly in the last decade, you've had the price of oil bouncing around due to supply and demand shocks. Now oil doesn't move much at all, and, consequently, there's very little volatility in inflation. If the volatility of inflation stays low, then the volatility of markets must stay low. When you drop the risk premium on the inflation component down, then all of a sudden every financial asset can stay higher for a longer period of time. Ciolli: What's your biggest market fear? Rieder: Complacency. Some areas of the financing market are too high. Central banks flooded the system with liquidity, and now they should pull back. If you don't have that normal give and take that markets generally calibrate to, prices end up being too high for too long, or yields too low, and you get a complacency that's not good. That's my biggest fear going forward. The longer you don't recalibrate — and build up volatility in the markets — that can create a bad outcome with real reverberations. It could adversely affect the lending dynamics in the country and shut down companies from investing. I think what the Fed is doing now is the exact right thing, but I think the ECB and BOJ should start moving as well. Central banks need to pull back and reach some equilibrium. Geopolitical risk also keeps me up at night, but I don't sleep much anyway, and that will always be there.SEE ALSO: Why BlackRock's $1.7 trillion bond chief gets up at 3:30 a.m. Join the conversation about this story » NOW WATCH: One type of ETF is taking over the market

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The 10 biggest box-office bombs of 2017

It's time to look back on 2017 and see what happened at the multiplex. And for some titles it wasn't pretty. Though 2017 found some success stories — like the early-year releases "Get Out" and "Split" from Blumhouse, the fall favorite "It," and presumably "Star Wars: The Last Jedi" when it comes out in mid-December — numerous titles were dead on arrival. For every "Beauty and the Beast" and "Wonder Woman" in 2017, there was a dud like "CHiPs" and "mother!" that quickly followed. Here are the 10 worst box-office earners of the year (compare them to our list from the halfway point). Note: This selection is limited to only those titles released by the six major studios that have played in more than 2,000 screens for at least two weekends. Grosses below are all US earnings from Box Office Mojo.SEE ALSO: RANKED: The 11 best movies of the year so far 10. "The House" — $25.5 million Reported budget: $40 million  (Note: Production budgets are estimates and do not include expenses for marketing and release.) 9. "Diary of a Wimpy Kid: The Long Haul" — $20.7 million Reported budget: $22 million 8. "CHiPs" — $18.6 million Reported budget: $25 million See the rest of the story at Business Insider

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2 Berkeley grads are using AI to make stock-buying decisions and it could change investing forever

Equbot's AI Powered Equity ETF uses IBM's Watson technology to construct a stock portfolio, employing machine learning to make rational investment decisions. The original idea for the fund was synthesized in a classroom at UC-Berkeley, where founders Chida Khatua and Art Amador met during an entrepreneurship class. Khatua's background in AI and machine learning complemented Amador's history in private wealth management, and the duo decided to launch an exchange-traded fund. When Art Amador worked in private wealth management at Fidelity, his clients expected him to know absolutely everything. Whether it related to global markets, macroeconomic factors, specific companies, or full sectors, their curiosities were wide ranging — and Amador wondered if he'd ever find a way to be the all-knowing oracle they desired. That all changed one day in the fall of 2014 when Amador was pursuing his MBA at the Haas School of Business at the University of California at Berkeley.As part of an entrepreneurship class, he was placed in the same cohort as a long-time Intel engineer and machine-learning specialist named Chida Khatua, and the two got to talking. That conversation led to what its creators say is the world's first AI-powered exchange-traded fund, one built on technology that could change the paradigm for how computers are used to invest. The fund — powered by IBM's Watson supercomputing technology — didn't end up launching for a few more years, but its roots can be traced back to that fateful first conversation at Berkeley. "I was telling him it was impossible to have infinite knowledge about every stock, and about everything going on in markets," he tells Business Insider. "I told him that there's simply too much information out there and not enough time to distill it into actionable ideas." As it turned out, Khatua had been researching for years how to sift through massive amounts of data in a way that extended far beyond human capabilities. With two master's degrees in computer engineering — including one from Stanford — he worked at Intel for 18 years, mostly focusing on machine learning. "His background — in artificial intelligence and machine learning — was the perfect use case," Amador says. "We started talking about how that could apply to the equity markets." Birth of an ETF Even though the early groundwork had been laid for what would eventually become their newest venture, Khatua and Amador went their separate ways after the program ended. But the gears in Khatua's head never stopped turning, and in September 2016 he invited Amador to join him in building a product that would combine their respective areas of expertise. Amador took some time to think about it. In his mind, the result would be an AI-powered quantitative hedge fund, and he wasn't sure if he wanted to give up his job at Fidelity for that. But Khatua had other ideas: He wanted to build and launch an ETF. To him, the ideal application for his technology was to get it into as many hands as possible. And if he combined it with Amador's investment prowess, they could build an ETF available to be traded by the average person with a brokerage account. "Working at Intel gave me insight into how machine learnings and AI technology is maturing and how the benefits it offers can really be maximized," Khatua tells Business Insider. "It gave me a unique perspective, and I asked myself for a while when the right time would be to go out and create some product that can help many people." Acting like a rational investor A big part of Amador's decision to ultimately join Khatua in pursuing an ETF was the latter's acceptance into the highest tier of the IBM Global Entrepreneurship Program. After all, his machine learning and AI efforts were powered by the company's Watson supercomputer. That gave Khatua $125,000 with which to pursue his idea, and it provided Amador crucial validation for the endeavor. He joined up shortly thereafter, and the duo launched Equbot. Then they put Watson to work. The eventual result was the recently launched AI Powered Equity ETF (ticker: AIEQ), which analyzes more data than humanly possible, all in the pursuit of building the perfect portfolio of 30 to 70 stocks. And the technology enables it to do that while constantly analyzing information for 6,000 US-listed companies. But there's a wrinkle. Equbot's AI model is built to act like a rational investor. In addition to analyzing regulatory filings, quarterly news releases, articles, social-media postings, and management teams, it's also designed to assess market sentiment and weed out potentially faulty inputs — including so-called fake news. "A rational investor looks at a company as a whole and they draw insight into what’s right looking at the complete picture," Khatua says. "The AI model helps us do that. The technology doesn’t only help you decide what to do; it can also educate you on why it’s happening." The technology doesn’t only help you decide what to do; it can also educate you on why it’s happening. That's a key element of AIEQ and one that sets it apart from the hedge funds that use AI to construct trading strategies. Khatua says many of those models function as a "conceptual black box," because the presence of certain stocks can't be explained in a rational way. In his mind, Equbot's ETF offers the best of both worlds: It's based on a mountain of analysis and the stock-picking methodology can be explained. "We know why something's in our portfolio after our system chooses it," Amador says. "'The system picked it' is not usually an explanation that investors will buy." Further, the machine-learning aspect of AIEQ is crucial in avoiding human error. Amador points out that even if a firm had 6,000 analysts each responsible for reading 150 to 200 articles about one stock each day, that work would have to be cross-referenced against the findings of all other employees, then funneled into one objective opinion. "Humans don’t have the speed, capacity, or retention to do this," he says. The story so far AIEQ has slid 0.9% since its launch on October 18, while the benchmark S&P 500 has risen 1.6%. The biggest laggards in the fund are Lifepoint Health, Newell Brands and Vista Outdoor, which have each dropped more than 20% over the period. But it's far too early to judge the success of AIEQ based on five weeks of returns. The more telling statistic is the volume of shares traded. The ETF has seen an average of 259,000 units change hands daily, a strong showing for a fledgling fund. It had about $70 million in assets on Monday, roughly 10 times its size during the first week of trading. The way that Khatua and Amador see it, interest in their product will continue to grow as long as personal bias continues to cloud investment decisions — something they see happening even at the highest level of professional money management. "You can remove that by making this investment process more autonomous, as we've done," Amador says. "It's nothing against people. It's just human instinct."SEE ALSO: The stock market's robot revolution is here Join the conversation about this story » NOW WATCH: One market expert says the financial system could collapse at any moment

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Android creator Andy Rubin is back at his phone startup after allegations of an 'inappropriate' relationship at Google

Andy Rubin led the charge for Android within Google. He left Google in 2014, and founded a smartphone startup named Essential in 2015. A report surfaced in late November on The Information, which uncovered a Google complaint from 2014 alleging Rubin had an "inappropriate" relationship with a colleague. He subsequently took a leave of absence from his startup, but has since returned. Andy Rubin is back at Essential, the smartphone startup he founded to take on his former employer, Google, and Apple. The "father of Android" took a leave of absence from Essential in late November after a report in The Information was published that concerned his time at Google. The report unearthed a Google internal complaint from 2014 that accused Rubin of having an "inappropriate" relationship with a colleague in Google's Android division. Rubin denied the allegation of a non-consensual relationship at Google through his spokesperson at the time and said his leave was due to "personal matters" and had been requested before the report from his time at Google surfaced. He also contested that he was even made aware of such a complaint. "Mr. Rubin was never told by Google that he engaged in any misconduct while at Google and he did not, either while at Google or since," Rubin's spokesperson Mike Sitrick told The Information. Essential launched its first product, a high-end smartphone, earlier this year.  It's not clear what the "personal matters" were that caused Rubin to the leave of absence, or whether the leave was for a specified period of time.  Recode first reported on Rubin's return to Essential late on Friday, citing two people close to Rubin; Business Insider has confirmed his return independently. Representatives for Rubin declined to offer an official statement.SEE ALSO: Essential's Andy Rubin has taken leave amid reports of an 'inappropriate' Google relationship Join the conversation about this story » NOW WATCH: The Navy has its own Area 51 — and it’s right in the middle of the Bahamas

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WALL STREET: More blockbuster mergers are coming

Firms across Wall Street are forecasting an upswing in corporate mergers and acquisitions activity in 2018 amid clarity around the GOP tax plan and robust cash levels. Merger activity is already accelerating into the end of 2017, with CVS' recently announced acquisition of Aetna the most recent example. If you're a fan of the corporate mega-mergers that keep getting announced, there's a good chance you're going to love 2018. At least that's the wisdom being touted by banks across Wall Street. But before we get into the mergers and acquisitions outlooks for some of the biggest firms, let's recap what's been a torrid second half of 2017 for large merger deals. Perhaps most notably, Broadcom is trying to buy Qualcomm for more than $100 billion, which would be the biggest tech takeover in history. In terms of deals that have actually been agreed upon, CVS Health is buying Aetna in the largest announced M&A deal of 2017. Back in September, United Technologies agreed to fork over $30 billion for Rockwell Collins in 2017's second-biggest takeover. And just last week, Roark Capital, which owns Arby's, said it would buy Buffalo Wild Wings for about $2.9 billion. With all of that considered, it's clear the M&A waters are churning, and the following Wall Street firms have taken notice. Goldman Sachs Goldman forecasts that cash M&A spending will climb by 6% to $355 billion in 2018. That will, in turn, boost the stock prices of companies with a high chance of being bought. As a result, a basket of likely M&A targets is poised to outperform in 2018 after trailing the broader S&P 500 in 2017, according to Goldman. The firm is also bullish on the fact that the picture for tax reform has been clarified — a stance it shares with Wells Fargo (below). In Goldman's mind, the M&A market was partially paralyzed as companies awaited specifics. "In 2018, robust confidence and reduced policy uncertainty should increase the fundamental incentive for corporate acquisitions," David Kostin, the head of US equity strategy, wrote in a client note. Wells Fargo The ramping of M&A activity is a big part of Wells Fargo's 2018 S&P 500 target of 2,784, which would mark a 5.5% increase from current levels. The firm estimates that mergers will continue in earnest during the first half of the year, driven by clarity around the GOP's tax plan and a groundswell of pent-up demand. Wells Fargo notes that US corporations are operating with too much capacity, but argues that this uptick in M&A activity will rationalize it. The firm is also closely watching the repatriation tax holiday, which it predicts will be a huge driver of merger activity as companies forego capital spending and share buybacks in favor of M&A. Robert W. Baird Baird's bullishness around M&A in 2018 stems largely from its outlook for private equity-backed companies. It notes that the number of such firms has surged by more than 30% from 2011 to 2017, growing each year. And Baird finds this meaningful because PE-backed companies are, by nature, more likely to be involved in M&A activity. The firm also sees strong Chinese buyer participation in certain sectors driving merger deals. Those industries include consumer, education and travel, it wrote in a recent report. And lastly, Baird thinks that steep competition among buyers will push offer prices higher as companies fight for the upper hand.SEE ALSO: A tug-of-war is raging over control of the stock market Join the conversation about this story » NOW WATCH: The Fed is trying to prepare for the next recession without causing it

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JPMORGAN: Here's what you should be reading, listening to, and visiting in 2018

Every year, JPMorgan polls its more than 200,000 employees for the next big trends in movies, books, music, theater, and more. Coined the #NextList2018, this year's recommendations run the gamut from the expected (the hedge fund legend Ray Dalio's new book) to the obscure (Ecuadorian parlor music). And yes, the name includes the hashtag. "The JPMorgan #NextList2018 represents our passion for discovery and desire to share new ideas and experiences that we hope will enrich our clients' lives for the year ahead," Darin Oduyoye, the head of communications for JPMorgan's asset and wealth management arm, said in a press release. "This curated collection of arts, culture, music, and book selections are sure to challenge traditional thinking and foster creativity for all those who explore it," he said. Here's the full list, with commentary from JPMorgan about why you should check out each suggestion:"Behave" by Robert Sapolsky "Why do we do the things we do? While scholar, endocrinologist, MacArthur Fellow and Stanford University professor Robert Sapolsky concedes this is a 'big, sprawling mess of a topic,' he is up to the challenge. "From neurobiological impulses that spur an act — good or bad — to the nature of free will, Sapolsky tackles the science of human behavior with formidable knowledge and a distinct sense of humor." Buy it on Amazon » "Generation Impact" by Sharna Goldseker and Michael Moody "Alex Soros, Victoria Rogers, Justin Rockefeller, Katherine Lorenz. Taking the reins on significant wealth, next-generation donors are leading a philanthropic revolution. But it's about more than money. Interviews with young philanthropists complement this in-depth look at new approaches, strategies, and tools that are influencing and reshaping the world of charitable giving." Buy it on Amazon » "Machine, Platform, Crowd" by Andrew McAfee and Erik Brynjolfsson "MIT's Andrew McAfee and Erik Brynjolfsson explore the trifecta of disruption that technology is bringing to our lives — artificial intelligence (machines), platforms and crowds. What is the impact on the workplace? On education? On leadership, from corporations to government? As in their highly praised 'The Second Machine Age,' McAfee and Brynjolfsson approach this complex topic with directness, insight, and clarity." Buy it on Amazon » See the rest of the story at Business Insider

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Gemini, the crypto exchange founded by the Winklevoss twins, extends maintenance after massive bitcoin sell-off

Gemini, the crypto exchange, extended a scheduled maintenance Saturday after a bitcoin sell-off. The exchange appeared to be down for some users for much of the morning. Bitcoin, the red-hot cryptocurrency, shed more than $1,500 during the downtime. The exchange will provide data for Cboe Global Markets' bitcoin futures contracts, which will go live Sunday. Gemini, the cryptocurrency exchange founded by the famous Winklevoss twins, has extended a scheduled maintenance of its site after a massive bitcoin sell-off. The company said Friday night that its site would undergo maintenance from 8:00 a.m. to 1:00 p.m. ET Saturday, adding that users shouldn't expect "downtime." Still, the site appeared to be down for some users during the period, preventing folks from accessing their cryptocurrency accounts.  At around 1:00 p.m. ET the company said the maintenance would continue: The outage coincided with a massive bitcoin sell-off, which shaved more than $1,500 of its price, according to Markets Insider data. By 1:22 p.m. ET, bitcoin was trading down 11% against the US dollar at $14,305 a coin. The outage infuriated some users who were unable to move their coins around as bitcoin's price slid. One person criticized the firm for not giving users enough notice on the original maintenance: Here's another discontent tweeter: Founded in 2015 by Tyler and Cameron Winklevoss, who reportedly own a billion dollars of bitcoin, Gemini is one of the best-connected firms in the cryptocurrency space. Cboe Global Markets is partnering with the exchange for its bitcoin futures contracts, which are set to go live Sunday. When volumes have increased on Gemini, the firm has faced challenges staying online. Earlier this month, the firm showed many users a "504 Gateway Time-out" message, which meant its servers were not responding to requests. The company posted on its status page that "systems are currently experiencing degraded performance." The exchange also experienced outages lasting as long as 10 hours in August, according to reporting by Quartz. “This is not the first scaling challenge we’ve encountered, and it won’t be the last,” Gemini said in a blog post. “We’re continuing to improve our performance and infrastructure monitoring so we can anticipate potential problems more quickly in the future.” Gemini did not respond to a request for comment. The first bitcoin futures depend on trading at the Winklevoss twins' tiny exchange — and that's a problem SEE ALSO: Cboe's president hints at ether and bitcoin cash futures Join the conversation about this story » NOW WATCH: Warren Buffett lives in a modest house that's worth .001% of his total wealth — here's what it looks like

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Bank of America has come up with the 'ultimate tax reform trade' that everyone is missing

Bank of America Merrill Lynch's David Woo says he's more optimistic than the consensus view on the GOP's ability to pass tax cuts, and on their market impact.  The "ultimate tax reform trade" is a bet on a steeper yield curve, specifically the 2s-10s curve, according to Woo.  Tax reform should increase the deficit and strengthen the dollar, both of which would steepen the spread between 2- and 10-year Treasurys, he forecasts.  If you're betting that tax reform would be a bigger deal to financial markets than others think, Bank of America Merrill Lynch has a trade for you.  A so-called bear steepener, which bets that long-term interest-rates will rise faster than short-term rates, is "the ultimate tax reform trade," according to David Woo, a BAML FX, rates, and emerging markets strategist. Specifically, Woo recommends bear steepeners on the spread between 2- and 10-year Treasury yields as one of his top 10 trades in the new year.  "One of the main consensus views going into next year is that tax reform means little and US growth remains in a 2% range, with yield curves and term premium heading into a typical late-cycle story: lower term premiums, flatter curves, lower inflation risk premium and lower vol," Woo said in a note.  "We disagree. We are more optimistic than consensus on both the ability of Congress to pass tax reform in the coming month(s) and the impact that it is likely to have on markets. "In our view, rarely has the longer-term rate outlook been more dependent on the short term." The Senate passed its version of the Tax Cuts and Jobs Act overnight on Friday. It's now set to hash out the differences between its bill and the House version that passed mid-November. Lower corporate tax rates for corporations and some households would impact interest rates in three ways, Woo said. First, tax cuts and deregulation on businesses could increase the neutral rate at which, in theory, the economy is growing at an optimal pace. Second, as the deficit increases to as much as $1 trillion in 2020 in BAML's view, interest rates could head in the other direction. Some studies have shown that deficits and interest rates have an inverse relationship.  Finally, Woo expects the dollar to strengthen as companies take advantage of a lower repatriation tax to bring back cash they've left overseas. A stronger dollar can reduce foreign demand for US Treasurys, in turn lifting yields; Woo noted that the weaker dollar this year encouraged more official buying of Treasurys.  "Based on our estimates, tax reform alone — were it to deliver a 1% deterioration in forward deficits, a 1% decline in foreign buying/GDP and a 0.25% increase to long term growth — could be worth 60-100bp on long-term real rates over the coming years," Woo said.  A few things could go wrong with this trade, including yet another incorrect interest-rate forecast. Rate strategists have collectively ended up wrong on the level of interest rates for several years. Investors at home and abroad continued to find US Treasurys more attractive than expected, sending their yields lower. And, if Congress fails to pass tax reform, markets would quickly change their outlook on how many times the Federal Reserve would raise interest rates, Woo said. SEE ALSO: Rich homeowners in blue states are among the biggest losers in the GOP tax plan Join the conversation about this story » NOW WATCH: One market expert says the financial system could collapse at any moment

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A Tesla-SpaceX merger would be the deal of the decade (TSLA)

A Morgan Stanley analyst and Tesla bull teased a merger with SpaceX. Tesla wouldn't gain any meaningful synergies from a tie-up, but its business would become more complicated. CEO Elon Musk would avoid the hassles of having to run two high-pressure public companies. Last year, Tesla merged with struggling SolarCity, making Elon Musk CEO of both companies. The tie-up hasn't hurt Tesla in 2017 as the company's stock has surged above $300 per share and the combined enterprise hit a market capitalization of over $50 billion. That doesn't mean it wasn't a terrible deal. Tesla's balance sheet instantly became loaded up with SolarCity debt, and what had been primarily a carmaker was suddenly responsible for rolling out a new solar roof product, at a time when it should have been all-hands-on-deck to launch the Model 3 mass-market vehicle. The Model 3 is woefully behind schedule at this point, and although the solar roof is compelling, The Solar City side of Tesla business isn't any more coherent than it was a year ago. Musk is also CEO of SpaceX, and last week Morgan Stanley analyst Adam Jonas teased a merger with Tesla, arguing that such a deal would yield powerful synergies. The financial mechanics of how a SpaceX-Tesla merger would happen are both speculative and unclear; in July, SpaceX raised $350 million, bringing it valuation to $21 billion. An IPO has long been discussed.  Musk might not want to run two public companies But maybe Musk doesn't want to be running another public company. He's expressed some exasperation with playing that role at Tesla, where investors have the carmaker under constant scrutiny and short sellers are always circling like sharks. SpaceX's mission is ultimately more ambitious than Tesla's — the whole go-to-Mars thing — and the company have been wowing the the space community by routinely launching and landing rockets. Tesla doesn't have enough cash to buy SpaceX outright, so investors would have to accept a largely stock-based deal, and that might make sense to many of them: since its own 2010 IPO, Tesla shares have returned over 1,ooo%, and several analysts have said that the stock hundreds of dollars of upside potential from its current level. Managerially, putting all the pieces of Musk's master plan — electric cars, solar power, space exploration — under one roof could ease the anxieties of anybody who thinks he's now stretched too thin.  Unfortunately, a Tesla-SpaceX merger would raise a major issue: unlike SolarCity, the company wouldn't be shifting a massive amount of debt to Tesla's balance sheet, but it would be shifting monumental risk. Space is dauntingly expensive when everything is going right but ruinously costly when things go wrong. That's why governments, for the most part, have been the only ones aiming for large-scale goals in the final frontier. Tesla-SpaceX would expose Tesla to colossal losses at a time when it's already posting record negative earnings. There are some serious positives in a merger On the positive side, Tesla would have access to SpaceX's goodwill with investors and the company's cash, around $1 billion. Nevertheless, Tesla balance sheet would become almost incomprehensible, as auto, energy, and aerospace analysts all struggle to figure out what the diverse conglomerate — with a theoretical $70-billion market cap — is worth. It's already a challenge to independently value the car, energy, and solar businesses (the default position is to kick solar and energy down the road and rightly ascribe almost all of Tesla's value to cars). If Tesla gains from a SpaceX merger, it could be the deal of the decade. SpaceX investors would potentially receive a much fatter payout (if they think Tesla has tremendous long-terms prospects), and Musk would be able to neatly avoid the pressure to handle two rounds of quarterly financial reporting and a whole new batch of prognosticators and short-sellers. On the other hand, merging with SpaceX could yield almost zero synergies — the car business and the aerospace industry might look similar but they're actually radically different — and add so much risk and volatility to Tesla already risky and volatile business that Tesla shares could get hammered and the company would see its access to capital reduced at precisely the wrong time. I'm betting on a merger If I were betting, I'd say that Tesla and SpaceX actually will merge, perhaps against some heavy SpaceX investors complaints. Tesla got away with it on SolarCity, Musk detests being the CEO of a public company, and SpaceX is really his baby. And Tesla stock has become a super currency, opening up all manner of financial options. Finally, the long stock-market rally that we've experienced in the aftermath of the financial crisis can last forever. Tesla got in early and has benefitted enormously. SpaceX might not be so lucky. The biggest risk to the company might be that despite its triumphs, it would be out there by itself nad subject to market forces that have nothing to do with its mission.  A merger with Tesla would save Musk from having to pull a SolarCity, Part Deux, and ride to rescue if SpaceX gets in trouble.SEE ALSO: FOLLOW US on Facebook for more car and transportation content! SEE ALSO: There's growing speculation Tesla and SpaceX could merge — here's why a deal would make sense Join the conversation about this story » NOW WATCH: Watch Tesla unveil a brand new Roadster, which Musk says will be the fastest production car ever made

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Deutsche Bank's brand new head of emerging market fixed income sales in Europe is already out

Deutsche Bank's head of emerging markets fixed income sales in Europe has left the company after only a couple months. Ken Reich was hired in September to help run the company's fixed income sales operation for Europe, the Middle East, and Africa. It was his second stint at the firm.    Ken Reich, who was hired by Deutsche Bank in September to help run its emerging markets fixed income sales operation in Europe, has left after only a couple months, the company confirmed.  It was not immediately clear why Reich left the firm after such a short stint.  Deutsche Bank declined to comment further on the matter.  Reich was hired as head of emerging market fixed income sales, covering Europe, the Middle East, and Africa in September. This was his second go around at the German bank, where he formerly ran global FX sales. Prior to returning to Deutsche Bank, Reich worked at Man Financial. Before that, he was the European regional head of financial markets for Standard Chartered in London. In the meantime, Reich's responsibilities will be assumed by others at the firm, including David Posen, global head of emerging markets sales. The bank has been expanding its emerging markets bond trading business, hiring nearly 20 debt traders and four sales people since mid-year. This story is developing.  Join the conversation about this story » NOW WATCH: A self-made millionaire describes the financial mistakes to avoid if you want to get rich by 30

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This top VC is investing in startups without ever meeting them with amazing results

Chamath Palihapitiya is trying to blow up the old-school, biased venture capital industry in every way he can think of. In the past few months he announced two new plans. One is a potentially industry-changing method of investing in startups all over the world, sight unseen. The other is a different way to fund bigger startups that's like an instant IPO.  Chamath Palihapitiya is living an epic life. He's a true rags-to-riches Silicon Valley success story. And he's got a plan to bring that same sort of success to millions of entrepreneurs around the world in a way that's blind to a person's sex, race, color, or nationality.  Palihapitiya is the founder and CEO of VC firm Social Capital, which has backed companies like Box, Slack, SurveyMonkey, Yammer. His new plan involves investing in startups without ever meeting with them. Palihapitiya is perhaps best known as an early Facebook employee whose Facebook stock left him a wealthy man in his 30s. He's also known for his stake in the Golden State Warriors basketball team. Palihapitiya was born in Sri Lanka and moved to Canada as a kid, a refugee. His family struggled financially but Palihapitiya has a gift for numbers and an abundance of street smarts. As a kid, he learned to count cards and won his classmates' quarters during lunchtime card games. He grew those winnings by playing Blackjack at charity gambling events. Shortly after graduating from college with an engineering degree he landed at AOL. That's where he met Mark Zuckerberg who hired him to be an early member of his management team. He's still a good gambler, known to host one of Silicon Valley's most popular poker games or take a spin with the World Series of Poker tournament held in Las Vegas. And all of that makes him comfortable risking money, even his own personal fortune, which is a major part of Social Capital's investment fund. Ludicrous and crazy His plan to invest in startups sight unseen is called capital-as-a-service or CaaS, a play on the name of the cloud-based software (software-as-a-service) that has transformed the tech industry. When CaaS is eventually released to the public – slated for 2019, he tells us, with beta testing going on now – it will involve software that automatically evaluates a startup's online fundraising application and approve it, or deny it. "If you're only talking about a small amount of money, $50,000 to $500,000, why can't we use our software and a lot of the things we learned over seven years of building companies, why can't we use that to make a decision?" he asks. "We have learned over time signals that predict company success." If you're only talking about a small amount of money, $50,000 to $500,000, why can't we use our software ... Examples of those signals include the company's revenue, revenue growth, average revenue per user, lifetime value of customers, total cost of acquisition, total addressable market and so on. The software verifies that the entrepreneurs are being truthful with the numbers by tapping into the cloud apps they use to run their business, such as data stored on Google's cloud. Palihapitiya likens the idea to the way banks treat loans. If a wealthy person asks JP Morgan for a multi-million dollar credit line, she'd get the white glove treatment in securing it. If a regular Joe is looking for a credit card, he'd submit a form and a software algorithm that predicts credit worthiness would decide. Right now the VC industry offers only white-glove treatment and the process is loaded with bias.  "It's ludicrous the idea that you could only get funding if you found a way to come to Silicon Valley on a Monday through Friday, from the hours of 9 to 5, if you happen to be of a certain gender or age, or etc. That's crazy," he said.  If the startup succeeds and needs access to more investment, "a $15 million or $20 million check, then we'll meet with them face to face," he said. Eyes wide shut The CaaS software will allow Social Capital to extend its hours of availability to 24x7 and extend its areas of investment to anyone, everywhere in the world.  And the bonus is that CaaS is totally blind to things like gender, race, sexual identity, color, what have you. And that has already produced some astounding results. Women founders received a scant 2% of all VC funding in 2016, according to PitchBook, a database that tracks VC deals. But in the closed first test for CaaS, earlier this year, out of 3,000 companies that applied, Social Capital funded "about 80 companies from 22 countries and 42% were women. And a huge number of them, like 1/3, were profitable," Palihapitiya said. "It just goes to show you, there are so many great people doing interesting things all over the world. What is not well distributed is this access [to capital]," he said. Not only that, but by using blind data, Social Capital is funding ideas he probably wouldn't have considered. For instance, he's now backing a company in Jakarta, Indonesia, that delivers dinner to young working women and their kids, so they could work longer hours.  Palihapitiya said that he's had hit-and-miss investments in food delivery and wasn't keen on the market. But the numbers were exceptionally good for this company serving this niche he had never heard of. Other examples include an affordable medical diagnostic tool in Mexico, an enterprise security platform in Turkey and a Kenyan mobile market research platform. Palihapitiya hopes that other VCs will follow his lead and invent their own version of CaaS and change the world. "If we get millions of people to start companies, so many interesting things will get created. So many things we didn't have any knowledge of will get created. The world gets more stable. There's probably more peace and prosperity," he said. "It requires us to close our eyes and be a bit more bias blind." He said there are amazing companies all over the world, "Let's throw a little bit of bread crumbs and tap into it." Reinventing the IPO In addition to inventing a new way to fund startups sight unseen, Palihapitiya is also trying to rejigger the way successful startups make their exits. He recently completed a $690 million IPO for a "special purpose acquisition company" [SPAC], a type of corporation also known as a blank-check company. He's going to use that money to buy one or more startups which will almost instantly turn them into public-traded companies, taking about 60 days via an acquisition, instead of the 18 month IPO process. He views this as a new kind of growth stage fund designed to let growth companies keep top employees. That's because it will give employees an easier way to sell the stock they are paid as part of their compensation. He isn't yet talking about the companies he's eyeing to be the first beneficiaries of his $690 million publicly traded fund. But he's still gung-ho about the method's long-term prospects. "We're in the business of providing funding to entrepreneurs," Palihapitiya said. "So we should just go and blow up the IPO process." Now that you've read about Social Capital's bold plans, take a deep dive into blockchains, the ground-breaking tech that could be as disruptive as the internet. SEE ALSO: 50 startups that will boom in 2018, according to VCs Join the conversation about this story » NOW WATCH: 15 things you didn't know your iPhone headphones could do

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The conference committee has barely started, and the GOP tax bill already has some big problems

The GOP tax bill is headed to a conference committee to hash out differences between the Senate and House plans. There are already issues forming, as Senate and House members have begun requesting various pet projects be included in the final bill. Republicans are closer than ever to turning their massive tax reform dream into reality, but they have run into some early snags in the process of attempting to unify their legislation. The Tax Cuts and Jobs Act (TCJA) is headed toward a conference committee to work out differences between the House and Senate versions. But already, some potential sticking points have begun to emerge.  Senators may not get what they were promised The biggest concern for Senate Republican leaders: Sen. Susan Collins of Maine. Collins voted for the first iteration of the TCJA because it included an amendment she wrote — as well as a guarantee that a bipartisan Affordable Care Act stabilization bill would at the least get the leadership's support. While Collins got the guarantee from Senate Majority Leader Mitch McConnell, House Speaker Paul Ryan has said he was not included in that agreement, potentially throwing Collins' support into question. "I wasn't part of those conversations," Ryan told reporters about the agreement. "I'm not deeply familiar with those conversations." Ryan did appear to warm up to the idea of bringing the so-called Alexander-Murray bill to the House floor for a vote on Thursday. But strong opposition to the bill among House conservatives could sink the measure regardless of the leadership's support. Collins' vote may not technically be needed for the bill since only one Republican voted against it as it passed the Senate (Bob Corker of Tennessee). The GOP can afford to lose two votes and still pass the legislation. But the issue could become exacerbated if another senator has qualms with the legislation. Enter Sen. Marco Rubio. "If #TaxReform conference weakens #ChildTaxCredit OR reduce corp cut but don’t make CTC refundable for working families, going to be problems," Rubio said in a Friday tweet. Rubio has been fighting to make the child tax credit more generous throughout the process. The Florida Republican tried to pass an amendment to make the credit, which was bumped up to $2,000 in the Senate bill, refundable up to a certain level. His amendment was defeated. But the House bill only increased the credit to $1,600, leaving open the possibility that the compromise legislation could make the credit less generous. GOP leaders are also considering cutting the corporate tax rate to 22% from the current 35% instead of the 20% proposed in both the House and Senate bills. The tweak would help pay for fixes to errors in the bill and other priori tes. Rubio said some of the newly raised revenue from a less generous corporate rate cut should go toward the child tax credit. The amendment Rubio introduced would have bumped up the corporate rate to 20.96% to pay for the refundable nature of the credit. Rubio did not threaten to pull his vote in favor of the original version of the TCJA, even after the vote on his amendment failed. Marc Short, the White House legislative director, told reporters after Rubio's tweet Friday: "Senator Rubio's going to be fine." House members may get defensive about changes Republicans in the House, meanwhile, are already staking claims on changes they want to see from the committee. A letter from 53 GOP House lawmakers urged Republican leadership to make sure that the estate tax (which conservatives call the "death tax") is totally repealed in the final bill. The Senate version of the legislation would  increase the threshold at which the tax applies to roughly $11 million from the current $5.6 million, but it would not fully repeal the tax. And like all individual tax changes in the Senate bill, the threshold increase would expire after 2025. "We are concerned about the current Senate plan, which falls short of the long term Republican goal by providing only temporary relief whole leaving the death tax in place," the letter said. Also on the House side, many members are fighting for a more generous state and local tax (SALT) deduction. Both the House and Senate bills would allow people to deduct $10,000 in state and local property taxes. House Republicans from high-tax states that use the SALT deduction heavily, like California and New York, want the $10,000 limit to apply to state and local income tax, as well. Gary Cohn, the National Economic Council director and Trump's top economic adviser, said Friday White House and leaders are open to a SALT deduction change in the final bill. Work by the conference committee is set to start on Saturday, Cohn said, and work on the compromise legislation could wrap up as soon as the following week.SEE ALSO: Republicans are about to confront Trump's 'red line' to fix problems in their tax bill Join the conversation about this story » NOW WATCH: 'It was bulls---': Megyn Kelly responds to being called Trump's 'chew toy'

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WALL STREET PAYDAY: Banks could pull in half a billion in fees from CVS-Aetna deal (CVS)

The $69 billion CVS-Aetna deal could generate more than half a billion in fees for Wall Street investment banks. The latest in a wave of megadeals is another big win for Goldman Sachs, as well as a handful of independents.  On Sunday, CVS Health agreed a deal to buy insurance giant Aetna in a $69 billion deal. The bankers who spent their weekend closing the transaction, the latest in a wave of megadeals, stand to earn a colossal amount of fees for their firms. Between advising on the transaction — which could generate significant regulatory scrutiny — and arranging more than $40 billion in financing, seven banks could split more than $500 million if the deal closes.  It's a big win for Goldman Sachs, which advised CVS on the deal along with Barclays and boutique Centerview Partners. The banks will split $100 million to $125 million, according to Jeffrey Nassof, director of consulting firm Freeman & Co. Goldman Sachs, along with Evercore Partners, is also representing Qualcomm, which is fending off a $130 billion takeover attempt by Broadcom in what would be the largest tech tie-up in history. It's also another big win for boutiques and independents, with three independents advising Aetna: Lazard, Allen & Co., and Evercore will also split $100 million to $125 million, according to Nassof.  The $250 million tab is the second-biggest payday of the year for advisory fees on an announced deal, according to Nassof, following only the Broadcom-Qualcomm transaction, which is very much in limbo.  The Aetna-CVS deal will also require an enormous amount of financing, where Goldman Sachs once again wins big. Along with Barclays and Bank of America Merrill Lynch, the firm will share in as much as $150 million for arranging the $45 billion bridge loan, and the underwriters could see another $200 million for placing some $40 billion in long-term bond financing, according to Nassof.  All told, that's potentially $600 million in advisory and financing fees from one deal.Join the conversation about this story » NOW WATCH: This is what you get when you invest in an initial coin offering

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Bank of America just told investors that its stock is cheap (BAC)

Bank of America has announced plans to buy back an additional $5 billion of its own stock, just five months after announcing a $12 billion repurchase. This latest buyback activity signals to investors that the firm sees its stock as attractively priced, and the action itself should be accretive to shares. The Federal Reserve gave approval for the capital plans of many Wall Street banks back in June, and this is an extension of that. Bank of America thinks its stock is cheap. And to show you that it's serious, the firm plans to buy back more of its own shares. Just five months after announcing plans to repurchase $12 billion of common stock over a one-year period, the bank on Tuesday said it would buy back an additional $5 billion by June 30. With this latest development, Bank of America has once again signaled to investors that it sees its stock as undervalued — hence its willingness to fork over cash to buy shares at current levels. And in a win-win of sorts, by reducing the number of shares outstanding, the firm will drive the price higher for its remaining stock. The firm could be reacting to what it perceives as further upside to its stock, now that the Senate has passed Republicans' tax bill. Banks are expected to get a boost from the tax plan, which is intended to improve US growth and allow firms to pay lower taxes. Financial firms have already been feeling the positive effects of a successful tax bill, having led gains in the S&P 500 over the past week. The sector has combined with telecom stocks to supplant tech as the best-performing segment of the market. Bank of America and other Wall Street heavyweights were emboldened to buy back more of their own stock back in late June, when the Federal Reserve gave across-the-board approvals for their financial plans — most of which heavily featured share repurchases and dividend increases. The firm's continued willingness to buy back shares comes with its stock already up 31% year-to-date. Still, that performance lags mega-cap tech titans like Amazon and Apple, which have soared roughly 50% apiece over the same period. CEO Brian Moynihan put it in simple terms at a conference in September: "Our stock's a good buy and we'll continue to buy it until the cows come home." Bank of America's stock climbed 0.9% in premarket trading on Tuesday, a day after surging 3.4%. SEE ALSO: One chart highlights the tug-of-war raging over control of the stock market Join the conversation about this story » NOW WATCH: THE BOTTOM LINE: The iPhone X's biggest myth, investing overseas, and why you should buy gold

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Greg Coffey, a hedge fund star who retired at 41, is eyeing a comeback

Greg Coffey, a star hedge fund manager who retired from the industry in 2012, is eyeing a comeback, according to people familiar with the matter. The founder of Moore Capital, Louis Bacon, once described him as "the most impressive trader I've ever seen." The situation is fluid, according to some of the people, and Coffey's plans could change.  Greg Coffey, a star hedge fund manager who bowed out of the industry in 2012, is said to be eyeing a comeback. Coffey is considering launching a new fund with James Saltissi, people familiar with the matter told Business Insider. The fund could launch as soon as March, some of the people said. The situation is fluid and could change, the people said, asking not to be identified discussing private matters. Andrew Honnor, a spokesman for Coffey at PR firm Greenbrook, declined to comment.  Coffey retired from the industry in 2012 at the age of 41, saying at the time that he intended to spend more time with family in his native Australia. He previously worked at GLG Partners and Moore Capital, where he ran two emerging markets funds. He later backed Saltissi's fund, Abbeville Partners, named after an area in London where Saltissi and Coffey used to live.  The founder of Moore Capital, Louis Bacon, once described Coffey as "the most impressive trader I've ever seen", according to a Financial News report from 2012. He specialized in big macro bets, and earned the nickname the "Wizard of Oz." Still, his investment performance at Moore "failed to live up to the stellar returns he delivered at rival manager GLG Partners, where he built his reputation and earned himself hundreds of millions of dollars by outperforming both the markets and other hedge funds in the heady bull market of 2005 to 2007," the report said.Join the conversation about this story » NOW WATCH: The CIO of a crypto hedge fund explains the value in cryptocurrency — and why the market will explode over the next 2 years

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It's easier than ever to bet on the death of brick-and-mortar retail

ProShares just launched its Decline of the Retail Store ETF, which allows investors to make the inverse of a brick-and-mortar index's return. The fund arrives at a time when many traders are skeptical about the future of traditional retail as online competition mounts. There's no denying that traditional retailers are in trouble. Fortunately for stock investors, it just got even easier to bet on their demise. ProShares, a provider of exchange-traded funds, just unveiled the Decline of the Retail Store ETF (ticker: EMTY) — a product designed to return the inverse of a brick-and-mortar store index. In other words, the price of the fund will rise when the underlying gauge falls. This allows investors to make a short wager of sorts on the entire industry by simply buying the ETF. For retail pessimists, this is a vast improvement over previous options, which included the shorting of single retail chain stocks and the real-estate investment trusts that own store leases. These bears also had the option of shorting retail ETFs, but those funds also contained online retailers — the very group putting so much pressure on brick-and-mortar. "Investors are witnessing signs of trouble in the malls and falling stock prices in the markets," Michael L. Sapir, the cofounder and CEO of ProShare Advisors, said in a press release. "For the first time, investors can turn these trends into a potential investment opportunity through an ETF." Officially launched for trading on November 16, the ETF has declined by 9.5% over its first two weeks. Based on that, it appears that the fund has been doing its job, with retail stocks rallying during the same period in the wake of a strong start to the holiday season. With all of this in mind, it's important for investors to note that the ETF is designed to return the inverse of a brick-and-mortar index on a day-to-day basis, rather than tracking longer trends. So, rather than a long-term bet on the decline of the sector, it's intended to be an instrument to time a particularly weak day for retailers — perhaps around earnings or another stock-moving event. The ETF comes in direct response to souring sentiment around traditional brick-and-mortar retailers as emerging online juggernauts like Amazon threaten their long-term future. And that long-term future looks bleak across the entire sector. Just two weeks ago, the clothing store J. Crew announced plans to close 50 stores amid tumbling sales. J.C. Penney, which is already planning to close 138 stores, had a disastrous third-quarter reporting period, bringing its stock decline to more than 50% on a year-to-date basis. Nordstrom's attempt to go private was derailed by a lack of investor interest, which was blamed on — wait for it — Toys R Us' bankruptcy earlier in the year. The situation shows just how interconnected the failings of various physical retailers have become. Those are just a few examples of the plight facing the industry. While EMTY is the first fund to function as a pure short bet against brick-and-mortar retailers, there are other ETFs offered by ProShares that can be used for a similar purpose. The only catch is that they're leveraged, meaning they're designed to return two or three times the inverse of a long-retail index. So if you're a relatively risk-averse investor looking to make a quick one-day bet on the death of retail, EMTY may be for you.SEE ALSO: A tug-of-war is raging over control of the stock market Join the conversation about this story » NOW WATCH: Tesla's biggest problem is one nobody saw coming

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A seismic shift that set off the retail apocalypse could hit companies like Coca-Cola and Pepsi next

Coca-Cola and PepsiCo could be the next victims of the retail apocalypse as consumers increasingly shop online. Up to 30% of beverage sales are impulse buys, according to one beverage industry analyst, and Coca-Cola and Pepsi target in-store shoppers. "I think the discourse around e-commerce remains an antiquated discourse," the analyst said, adding "On average, they don't know what they're doing." Beverage industry giants like Coca-Cola and PepsiCo could be in deep trouble as consumers ditch in-store shopping for e-commerce, analysts say. Impulse buys make up roughly 30% of overall beverage sales, Ali Dibadj, an analyst at Bernstein, said at Beverage Digest's Future Smarts conference in New York on Friday. As people increasingly shop online, those sales are in danger. "That's something that's not being addressed right now," Dibadj said. Without customers grabbing a Diet Coke while checking out at Walmart or a two-liter bottle of Pepsi at the grocery store, the beverage industry could be in trouble. As sales of soft drinks by volume have dropped for 12 consecutive years in the US, companies like Coca-Cola and PepsiCo do not want to risk losing an opportunity to get their products in customers' hands. "I don't think most beverage companies are particularly well prepared" for the rise of e-commerce, Caroline Levy, a senior analyst at Macquarie Capital, said Friday. Dibadj added: "I think the discourse around e-commerce remains an antiquated discourse ... On average, they don’t know what they‘re doing to capture impulse, but they will out-buy smaller brands."  Coca-Cola and PepsiCo have contested the idea that they're ignorant of the rise of e-commerce. Both companies mentioned e-commerce sales in their presentations at the conference on Friday. Coca-Cola, specifically, says it has been investigating click-and-collect grocery sales, bundled deals (such as meal kits), and new impulse "triggers" online. Still, considering the apocalyptic effect that customers' shopping online has had on brick-and-mortar retailers and industries, including food and beverage companies the impact of e-commerce cannot be underestimated. Speaking about the industry's "seismic shift" toward digital and mobile, Starbucks CEO Kevin Johnson told investors earlier this year that "retailers who are agile and reimagine the art of the possible will be big industry winners." "Those who do not will struggle mightily," he added. With a huge chunk of their business at stake, Coca-Cola and PepsiCo can't afford to fall behind — or have an industry rival beat them to the punch. "Until the day we have instantaneous cold beverages delivered to our home while we're sitting at our computer, e-commerce challenges impulse," Dibadj said.SEE ALSO: Starbucks' new Christmas Tree Frappuccino is its most brilliant social-media stunt drink yet Join the conversation about this story » NOW WATCH: The dark story behind the term 'Black Friday'

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Apple's Jony Ive will take back control of his famous design team (AAPL)

Jony Ive, Apple's long-time head of design, will resume management of the company's design team. Ive relinquished his day-to-day administrative role two years ago, when Apple named him its chief design officer. The move comes amid growing criticism of the design of the company's products. In a move that could indicate that Apple is refocusing on the design of its products, it's put Jony Ive back in charge of its design team. Ive stepped back from his day-to-day administrative duties in 2015, when he got his current title, chief design officer. His resumption of managerial duties follows a wave of criticism about many of the company's products even as the iPhone maker touted the design of its futuristic new headquarters, Apple Park.  "With the completion of Apple Park, Apple’s design leaders and teams are again reporting directly to Jony Ive, who remains focused purely on design," an Apple spokesperson told Business Insider.  Ive's deputies, Alan Dye and Richard Howarth, who headed up user interface and industrial design, were removed from Apple's leadership page on Friday, 9to5Mac reported. Both the user interface and industrial design teams will report to Jony Ive, a person familiar with Ive's new role told Business Insider.  Bloomberg first reported the news.  During Steve Jobs' tenure as CEO, Ive effectively served as his right-hand man, leading the industrial design of all of Apple's major products that led to its remarkable rebound and later industry dominance, including the iPhone. He's still seen as one of the most important executives at the company. However, when Ive relinquished his day-to-day duties two years ago, the move was widely seen as the first step toward his eventual retirement. And in recent years, many Apple watchers have speculated that he had taken a less-involved role at the company.  As part of the management shift, Ive will once again run Apple's industrial design department, which is charged with imagining and designing breakthrough products like the iPhone. In the past, Ive often gave concepts to Apple's engineering department, telling them to make the product design possible, which is counter to how industrial design works at other high tech firms. Apple's products have faced a substantial amount of criticism in recent years. Many of its Mac computer lines, most notably the Mac Pro and Mac mini, haven't seen a significant update in years. And many users have complained that the keyboards on the company's latest laptops are hard to type on and that the Touch Bar — a narrow, re configurable, touch-sensitive screen found on some of the company's notebooks — is little more than a gimmick. Even the iPhone, Apple's flagship product, drew criticism after it went three years without a major redesign before the company released the iPhone X this fall. Join the conversation about this story » NOW WATCH: Amazon has an oddly efficient way of storing stuff in its warehouses

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The first bitcoin futures depend on trading at the Winklevoss twins' tiny exchange and that's a problem

Cboe Global Markets' bitcoin futures product launches Sunday.  Cboe is basing its bitcoin futures contract on pricing on Gemini, the cryptocurrency exchange founded by the Winklevoss twins.  Bitcoin futures will allow investors to bet on the future price of the red-hot cryptocurrency. But a number of concerns hang over Gemini including low volumes on the exchange and system outages.  All eyes will be on Cboe Global Markets on Sunday when it launches futures contracts for bitcoin. The Chicago-based derivatives market is the first established exchange to roll-out futures for the red-hot digital currency. Futures are contracts that will let investors bet on the coin's future price.  While bitcoin enthusiasts are excited about the attention — and big money — a new futures market could bring to the digital coin, concerns hang over Gemini, the cryptocurrency exchange Cboe is working with to launch the contracts.  Founded in 2015 by Tyler and Cameron Winklevoss, who reportedly own a billion dollars of bitcoin, Gemini is one of the best-connected firms in the cryptocurrency space.  But Gemini is still small, and trading in its price-setting auction is thin enough that it could be manipulated, according to critics. Cboe will be basing the price of its futures on this auction, which means any sudden shift in the set price could make the difference between a contract that is a money maker or a money loser.  Then there's the fact that Gemini has suffered outages when demand for bitcoin skyrockets. Gemini tracks the overall market pretty closely with an average difference of just 0.1%, according to Gemini data. The product was designed with one exchange to make it easier for traders to hedge their holdings of the underlying asset. And Cboe would rely on a backup index based on data from six exchanges if Gemini were to crash. Gemini did not respond to an email seeking comment.  Smallest among rivals Gemini is much smaller than many of its rivals in the bitcoin-trading space. Ranked fourteenth globally by 24-hour trading volumes, the exchange sees only 1.4% of trading in the entire bitcoin market, according to data from CoinMarketCap.  Its size is concerning to some trading firms which don't like the idea of an entire market for futures being based on data from one exchange with thin volumes. The logic is, since Gemini is so small, its activity can't paint an accurate picture of the broader crypto-market. Cboe's futures will be based on the auction price of bitcoin on the Gemini exchange. Settlements for the contracts, the payout a trader either receives or pays out for their bet, will be determined each day at 4:00 p.m. The first settlement is not set to occur until January.  "I'm concerned that the Gemini auctions often have very low volume and the lack of liquidity may lead to the futures settling at a price that is not indicative of where bitcoin is trading on other venues, due to the localized supply/demand imbalance in the auction," Garrett See, the CEO of DV Chain, the cryptocurrency trading arm of Chicago-based DV Trading, told Business Insider.   Market manipulation John Spallanzani, the chief macro strategist at GFI Group, told Business Insider Gemini's low volumes could be a problem because it could lead to market manipulation.  "The lower the volumes, the easier to manipulate," he said. "Since the volume is low and [bitcoin] is unregulated it is conceivable." "The last thing we want is another Libor-type scandal," he added, referring to a scandal in which banks rigged the price of the London Interbank Offered Rate to benefit their positions in the derivatives market. Banks have been fined billions of dollars for manipulating the rate, which provided the base for a loan market worth a $300 billion. "This is one exchange which comprises a relatively small amount of bitcoin dollar traded volumes globally," Greg Dwyer, the head of business development at BitMEX, a bitcoin derivatives exchange based in Hong Kong, said, referring to Gemini. "So there are concerns that there could be adverse price movements due to this illiquidity or some bad actors in the space trying to move the price at settlement." Such market manipulation would not easily get past regulators at the CFTC, the body that oversees futures in the US, according to Dwyer. It also wouldn't get by Cboe, which has information sharing in place and would watch for irregularities during the auction. As for Gemini, the exchange is required to know exactly the entities trading on the exchange during the auction because of Know-your-customer requirements by New York law.  Crypto-insiders are also concerned about Cboe's futures product. I Am Nomad, a popular crypto-trader who declined to identify his identity for fear of reprisal from his employer, shared his criticism of Cboe's futures contracts in a recent Medium post.  "The Gemini Exchange, while being a solid US-based exchange, makes up a very small percentage of the global volume," he wrote in a blog post. "More importantly, the auction itself sometimes has days where it has low volume or doesn’t complete at all." Dave Weisberger, CEO of CoinRoutes, told Business Insider Gemini's size is irrelevant. He said the design of Cboe's futures contracts embeds more certainty into the market. Here's Weisberger in a LinkedIn post: "Using a single point in time auction to create the settlement price at expiration, has advantages.  It is more deterministic (investors long bitcoin and short futures can precisely manage their exposure at expiration), and harder to manipulate." Still, exchange clients appear to be concerned about Gemini's small command of the market. A person familiar with Nasdaq's futures contracts, which could launch as early as the second quarter of next year, told Business Insider clients of the exchange voiced their concerns about a product based on too few indexes. Nasdaq's bitcoin futures contract will track 50 indexes, whereas CME Group, Cboe's cross-town rival, is set to track four.   Outages When volumes have increased on Gemini, the firm has faced challenges staying online.  Earlier this month, the firm showed many users a "504 Gateway Time-out" message, which means its servers were not responding to requests. The company posted on its status page that "systems are currently experiencing degraded performance." The exchange also experienced outages lasting as long as 10 hours in August, according to reporting by Quartz.  “This is not the first scaling challenge we’ve encountered, and it won’t be the last,” Gemini said in a blog post. “We’re continuing to improve our performance and infrastructure monitoring so we can anticipate potential problems more quickly in the future.” Outages in the crypto-world are commonplace, and Gemini is far from the only exchange dealing with such issues. See told Business Insider crypto-exchanges in a sense are still "websites" that lack "the industrial scale" of traditional exchanges. And with cryptocurrency volumes topping as much as $26 billion in a single trading day, exchanges and trading firms are under pressure to enhance their technology.   Read more about blockchain, the technology powering bitcoin, here. Join the conversation about this story » NOW WATCH: Economist Jim Rickards on gold versus bitcoin — intrinsic value is meaningless for both but the bitcoin prices aren't real

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The legal marijuana market is exploding it'll hit almost $10 billion sales in this year

Legal marijuana sales are predicted to hit $9.7 billion in 2017, a 33% increase over 2016, according to a new report.  The growth is buoyed by new states legalizing marijuana, and sales exceeding expectations in existing markets.  Analysts predict the market to hit $24.5 billion in sales by 2021, despite continued federal prohibition.    The market for legal marijuana is heating up in a big way. Legal marijuana sales are predicted to hit $9.7 billion in North America in 2017, according to a new report from cannabis industry analysts Arcview Market Research, in partnership with BDS Analytics. That represents an unprecedented 33% increase over 2016, shattering previous expectations about how quickly the cannabis industry could grow in the face of federal prohibition. The report further predicts the entire legal cannabis market to reach $24.5 billion in sales — a 28% annual growth rate by 2021 — as more states legalize marijuana for recreational use and existing markets mature.  "Aside from cryptocurrency, there is simply no other industry changing as rapidly or as unevenly as the cannabis sector," Troy Dayton, Arcview's CEO said.  The industry's growth is buoyed by a number of new state-legal markets coming online in 2017. Nevada, where legal marijuana sales began in July, raked in $27 million during the first month of sales, according to the report, prompting a supply shortage that forced Gov. Brian Sandoval to issue a "statement of emergency" to bring more marijuana into the state.  Revenue for the first six months of 2017 in Colorado, Washington, and Oregon — the first three states to legalize marijuana for adult-use — ran 33% ahead of 2016, also indicating that the market is still growing, according to the report.  California is set to begin sales of recreational marijuana on January 1, adding a massive consumer base to the industry. And Canada is set to begin nation-wide sales on July 1, 2018. "Our data shows positive indicators across the board for the legal cannabis industry, in North America and around the globe," said Tom Adams, Arcview's editor-in-chief. "That's nothing compared to what we can expect in 2018 and beyond from Nevada's tourism, and California and Canada planning to launch adult-use sales in 2018." The report notes that the projection hinges on the assumption that the federal government does not crack down on state-legal cannabis, nor does it assume that there will be a host of new states legalizing marijuana in the next few years.  Attorney General Jeff Sessions is a noted opponent of marijuana legalization, though the Justice Department has not yet indicated that it would seek to prosecute state-legal marijuana businesses. Recreational marijuana is legal in seven states, and some form of medicinal marijuana is legal in thirty states. Marijuana is still considered an illegal Schedule 1 drug by the federal government, however.  A Gallup poll released in October indicates 64% of Americans support legalizing marijuana for both recreational and medicinal use, the highest support since Gallup first asked the question in 1969.SEE ALSO: A fast-growing cannabis tech company just raised $10 million in a bid to dominate the market Join the conversation about this story » NOW WATCH: The disturbing reason some people turn red when they drink alcohol

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Apple is buying Shazam for $400 million (AAPL)

Apple is buying Shazam, a music recognition app.  Apple will pay $400 million for the company, which was last valued at $1 billion. Apple is close to acquiring music recognition app Shazam for $400 million, a source familiar with the matter told Business Insider on Friday. The deal could allow Apple to integrate a popular consumer feature directly into its iPhones at a time when Apple's innovation crown is under threat from Google and Samsung.  The Shazam app allows users to identify the music that's playing nearby, such as a song in a restaurant or cafe. The app quickly became one of the most popular smartphone apps when it launched in 2009 and has been downloaded more than one billion times by consumers. Google recently incorporated similar technology into its high-end Pixel 2 smartphone. Google's version of the technology constantly monitors nearby music, displaying each song title on the phone's screen — a handy feature that may have led Apple to conclude it needed to offer a similar function in its iPhones in order to not appear behind the curve.  Shazam CEO Rich Riley previously told Business Insider that the company would make sense insider a larger company looking for a foothold in music or advertising. Representatives for Apple and Shazam did not respond to a request for comment about the acquisition. News of the deal was first reported Friday by TechCrunch, which said the deal was expected to be signed this week.  Reports of Apple's interest in Shazam surfaced on the same day that Apple announced that longtime executive Jony Ive will resume day-to-day management of the company's design team. Acoustic fingerprints and augmented reality The $400 million price that Apple is offering for Shazam is lower than the most recent post-money valuation of $1.02 billion, according to Pitchbook. However, that valuation is "a bit artificial," the person close to the deal told Business Insider. Later investors received a liquidation preference and will get their invested money back first before other shareholders, including employee options.  Shazam, which was founded in 1999, made $50 million in revenue last year, according to another person familiar with the company.  The company is based in London and has created a database of more than 11 million "acoustic fingerprints" that it uses to identify songs. More recently Shazam has developed augmented reality technology that allows users to point their phones at a special label to see additional information. A partnership with gin maker Bombay Saphire makes the bottle appear to undergo various transformations when consumers point their phones at it.  Shares of Apple were unchanged in after hours trading on Friday. Email the author at kleswing@businessinsider.com.SEE ALSO: REVIEW: If I were to buy an Android phone, it would be the Pixel 2 XL Join the conversation about this story » NOW WATCH: A guy who reviews gadgets for a living spent a week with the iPhone X and the Pixel 2 — the winner was clear

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Twitter's chief dealmaker, Jessica Verrilli, is leaving (TWTR)

Twitter's VP of corporate development and strategy, Jessica Verrilli, has left. She worked at Twitter for over 8 years and helped oversee dozens of aquisitions. Twitter's head of mergers and acquisitions, Jessica Verrilli, has left the company. In a series of tweets on Friday, Verrilli said she had resigned and intended to be more active in Hello Angels, a venture capital firm she co-founded with other current and former female Twitter employees in 2015.  As VP of corporate development and strategy at Twitter, Verrilli was responsible for the company's acquisitions and oversaw deals such as MagicPony and Yes Inc. She joined Twitter eight years ago, when the company had fewer than 40 employees. Twitter acquired more than 30 companies during Verrilli's tenure. She briefly left Twitter in 2015 for a short stint at Google Ventures and returned six months later to oversee the deal team. A Twitter spokesperson declined to comment beyond Verrilli's tweets. Verrilli is the company's latest high-profile departure since a string of execs left late last year. The company's ex-VP of revenue products, Ameet Ranadive, announced Friday that he had joined Instagram as a VP alongside Kevin Weil, the Facebook-owned app's head of product. Weil jumped ship from the same role at Twitter in early 2016. You can read all of Verrilli's tweets announcing her departure below: They say start-ups are a marathon, not a sprint. At Twitter, I feel like I’ve been sprinting an ultra marathon for 8.5 years and it’s been the most exhilarating, dynamic, and rewarding run of my life. — Jessica Verrilli (@jess) December 8, 2017 But now I’m ready to take time off, recharge, and figure out what’s next. I’m resigning from my role as VP of Corporate Development & Strategy and transitioning out over the holidays. — Jessica Verrilli (@jess) December 8, 2017 It’s impossible to sum up a journey that started with 34 ppl in a small office. My best memories aren’t the ones that made headlines, they're the unique human experiences of working w/ extraordinary people in pivotal moments of building a company. Twitter has been full of them! — Jessica Verrilli (@jess) December 8, 2017 Leading acquisitions is a joy, not a job. I will always appreciate the trust founders placed in me to be a partner through these important journeys. And @corpdev, you set the bar! Thank you for letting me be your teammate and leader with @smanak! — Jessica Verrilli (@jess) December 8, 2017 There are no founders I’m more grateful to than @jack and @ev. Working with them and the entire Twitter team has been an incredible privilege. Thank you. Thank you. Thank you! ?? — Jessica Verrilli (@jess) December 8, 2017 Now I’m looking forward to the holidays and perhaps a literal marathon, now that I have no excuses for not training. I’m excited to spend more time investing with @HelloAngels and figuring out what's next. I’ll be on the trails, in coffee shops, and of course on Twitter. — Jessica Verrilli (@jess) December 8, 2017 SEE ALSO: One of Facebook's top dealmakers is joining Pinterest to scoop up more companies Join the conversation about this story » NOW WATCH: Trump's Twitter account was deactivated for 11 minutes because of a disgruntled employee — here are the best reactions

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The Bill Ackman problem everyone forgot is now at threat-level substantial

The insider trading case against Pershing Square founder Bill Ackman and Valeant Pharmaceuticals may go to trial. Investors in Allergan Pharmaceuticals are suing Ackman and Valeant over their hostile takeover of the company in 2014. There may be a Bill Ackman insider-trading trial on the way. You may recall that investors in Allergan Pharmaceuticals are suing the billionaire hedge fund manager and Valeant Pharmaceuticals over their 2014 attempt to buy Allergan in a hostile takeover. These investors claim that they were kept in the dark as Ackman built his position in Allergan, and then collaborated with Valeant on an attempted hostile takeover of the company. Ackman and Valeant wanted the case thrown out, but a California judge just denied the request, at least tentatively. That means, unless the judge changes his mind or the parties can come to a settlement outside of court, this matter will go to trial. Pershing Square is not commenting on the matter. It was a weird trade Shareholders in Allergan, including the State Teachers Retirement System of Ohio, sued Ackman and Valeant on the basis of SEC Rule 14 e-3. Basically, it says if company A is planning to take over company B, anyone with knowledge of that takeover can't trade company B shares once things are in motion. And here's the trade they're applying it too — which was admittedly, even to observers at the time, pretty strange: During the 2014 hostile takeover attempt, instead of buying Allergan outright, Valeant teamed up with Ackman, who purchased a large chunk of Allergan shares. Ackman's stake was disclosed alongside Valeant's hostile takeover offer, and — surprise! — the billionaire said he would vote his newly acquired Allergan shares in support of the sale to Valeant. Ackman then pulled out the activist-investor playbook to pressure Allergan to accept an offer from Valeant. He wrote nasty letters describing Allergan's "incredibly inappropriate" behavior as it sought to fend off the takeover by a company that was known for slashing research-and-development spending and jacking up drug prices. That didn't work. Allergan was eventually rescued by a white knight and Ackman — still an Allergan shareholder — made a bundle (about $2.6 billion by one count). Valeant profited a great deal too, because as part of its deal with Ackman meant it got a portion of his profits. The rest is investment history. Ackman, who hadn't invested in Valeant during the Allergan attempt, became one of its biggest shareholders. So Pershing Square was one of the worst hit when high-flying Valeant collapsed 90% from 2015 to 2016 after fraud was discovered at the company. Ackman has since left Valeant. Valeant itself has stabilized. But this case remains the way Ackman and Valeant could still see all their gains washed awaySEE ALSO: Bill Ackman Just Perfectly Executed The 'Heads I Win, Tails You Lose' Trick That Makes Wall Street Famous Join the conversation about this story » NOW WATCH: 6 airline industry secrets that will help you fly like a pro

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Etsy usually has a great holiday season but Amazon could ruin things this year (AMZN, ETSY)

The holidays have traditionally been a special time for Etsy. As is the case with many retailers, Etsy's sales tend to spike during the holiday shopping season. But for the purveyor of handmade goods, the jump in sales has usually been especially dramatic, as we can see in this chart from Statista. To spur another big year, the company recently added some new features to its site, including a gift finder service, a gift-wrapping option, and free shipping on selected items. However, Etsy's ability to reprise its holiday good fortune is an open question now that Amazon is aiming for a bigger piece of the homemade goods market. The e-commerce giant announced this week that products from its Amazon Handmade site will be available via its Prime Now delivery service until Christmas Eve. Late shoppers can use that option to place an order and have their gifts delivered within one or two hours — in plenty of time for Santa. That's great news for Amazon customers, but maybe not for Etsy. SEE ALSO: Google and Facebook dominate digital advertising — and they now account for 25% of all ad sales, online or off Join the conversation about this story » NOW WATCH: The Navy has its own Area 51 — and it’s right in the middle of the Bahamas

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The credit market is priced for perfection and that won't last

In the Fidelity Insight of the week, Business Insider executive editor Sara Silverstein speaks to Ford O'Neil, a fixed-income fund manager at Fidelity. He says that as the Fed prepares to unwind its massive balance sheet, there will be pressure on both interest rates and mortgage spreads. In terms of the stocks versus bonds debate, he notes that the equity market is embracing President Trump's pro-business agenda, while bonds are more mixed. O'Neil then says that low rates in Europe and Asia are driving overseas demand for US rates. Lastly, he says that corporate credit spreads are priced to perfection, and predicts that they'll be wider in a year.Join the conversation about this story »

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We're about to get the first 'clean' jobs report in a few months here's what Wall Street is looking for

The November jobs report will be released on Friday.  After hurricanes slowed down job creation in the fall, this should be the first reading on the labor market without weather-related distortions. The Federal Reserve is set to raise interest rates again next week, and will likely cite a strong labor market as one of its reasons.    The final US jobs report released in 2017 is due on Friday, and it will be revealing. This fall, the hurricanes that hit the Southeastern US kept many Americans away from their jobs and off their employers' payrolls. This led to a very weak month of job creation in September, with just 18,000 nonfarm payrolls added. But this was followed by an impressive October as people returned to work. And so, the past two months have not provided a clear reading on how the job market is doing.  "Following hurricane-distorted activity over the prior two months, November’s employment report performance should be a 'clean' read on the health of the US labor market as the year comes to a close," said Sam Bullard, a senior economist at Wells Fargo, in a note. Here's what economists forecast will be in the Bureau of Labor Statistics' report, via Bloomberg:  Nonfarm payrolls: +195,000 (261,000 prior) Unemployment rate: 4.1% (4.1% prior) Average hourly earnings month-on-month: +0.3% Average hourly earnings year-on-year: +2.7% (2.5% prior) Average weekly hours worked: 34.4 Nearly 200,000 net new jobs and the lowest unemployment rate in 17 years would make for a strongly headlined report. Additionally, sectors that weren't affected by the hurricanes have held up in recent months:   In a note, Nomura's Lewis Alexander points out that the manufacturing sector has recently made above-average contributions to economic growth, and could have gained up to 20,000 payrolls in November. Exports, equipment, structures, and inventory investment have contributed an average of 1.3 percentage points to gross domestic product-growth over the past two quarters. That's an improvement from the average drag of -0.22 percentage points during the previous nine quarters, as the sector faced lower overseas demand due to a stronger dollar, Alexander said. The Commerce Department said last week that the economy grew faster than initially reported in the third quarter, at a 3.3% annualized rate. It was the fastest pace in three years, and bodes well for the jobs market.  Next Wednesday, the Federal Reserve is most likely to raise its benchmark interest rate again and cite a strengthening labor market as one of the reasons why. "Looking ahead, it’s going to be interesting to see whether the Fed starts to get worried about further falls in unemployment," said Luke Bartholomew, an investment strategist at Aberdeen Standard Investments, in a note. "Falling unemployment is generally thought of as a universally good thing. But good news could become bad news if it looks like unemployment has dropped so far as to signal an economy overheating. This would force the Fed onto the back foot and possibly into a more aggressive set of rate hikes." Slow wage growth, however, may continue to give the Fed reason to raise rates slowly. One bright spot in wages is the fact that low-income earners have experienced faster growth this year than people with high-paying jobs.   SEE ALSO: Bank of America has come up with the 'ultimate tax reform trade' that everyone is missing Join the conversation about this story » NOW WATCH: How to buy and sell bitcoin using one of the most popular cryptocurrency apps on the iPhone

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Jobs report crushes expectations as hurricane impact fades

The US economy added 228,000 nonfarm payrolls in November, more than economists were expecting. The unemployment rate held at a 17-year low of 4.1%. But wage growth was slow and weaker than expected, suggesting that many Americans are still on the sidelines of the full-time job market. Retail hiring was strong ahead of the busy holiday season. The manufacturing unemployment rate fell to a record low. The US economy added 228,000 nonfarm payrolls in November, more than economists had forecast, a report on Friday from the Bureau of Labor Statistics showed. The unemployment rate remained near a 17-year low of 4.1%. Overall, the report demonstrated that job creation remained strong in the US even after deadly hurricanes slammed into the Southeast this fall and temporarily weakened hiring. Economists had forecast that nonfarm payrolls increased by 195,000 on net with the unemployment rate unchanged at 4.1%, according to Bloomberg. Wage growth was weaker than expected. Average hourly earnings rose 0.2% from October and increased by 2.5% compared with November 2016. Some structural forces, including changes in the labor-force makeup between high-income and low-income earners and lower labor-market turnover, are likely keeping wage growth slow. But weak wage growth is also an indication that many Americans either are still not looking for jobs or are wanting to work full time but can find only part-time jobs. The labor-force participation rate held at 62.7% from October. The manufacturing sector added 31,000 jobs, while its unemployment rate fell to a record-low 2.6%. This shows an extension of its recovery this year after a slump in 2016 that was partly caused by the stronger dollar, which made US products more expensive for other countries. Retail also had a strong month ahead of the busy holiday-shopping season, adding 18,700 jobs even as thousands of brick-and-mortar stores are being closed. Restaurants and bars, which bore the brunt of the hurricane impact, added 18,900 jobs last month.SEE ALSO: Bank of America has come up with the 'ultimate tax reform trade' that everyone is missing Join the conversation about this story » NOW WATCH: We talked to the bond chief at the $6 trillion fund giant BlackRock about the most important issue for markets right now

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A $2.7 trillion investment chief on why you should consider investing in China

Business Insider executive editor Sara Silverstein sits down with Lori Heinel, the deputy global chief investment officer at State Street Global Advisors. She says her firm is constructive on China right now, citing political stability. She notes that a great deal of incremental global growth is coming from there. In terms of investment opportunities, she says the situation in China provides additional support for equities around the world, and also gives people the opportunity to look at China-specific corporations.Join the conversation about this story »

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Betting against bitcoin is about to get a lot more expensive

The cost of shorting bitcoin could skyrocket once futures trading starts on Sunday, says S3 Partners. The ultra-volatile cryptocurrency has seen massive fluctuations in recent days, and making bets on either side of it is about to get more expensive. If you think bitcoin has gotten out of hand, now is the time to make your wagers against the surging cryptocurrency. New short positions on bitcoin are being charged an 18.5% fee right now. But that could swell to over 50% and possibly even approach 100% by the time Cboe Global Markets launches bitcoin futures trading on Sunday, according to financial analytics firm S3 Partners. However, those who elect to short bitcoin should do so at their own peril, because the start of futures trading will also make it easier and safer for speculators to bet on further increases. Either way, transacting bitcoin is about to get more expensive for everyone involved, says S3. "Both sides will be paying a premium in order to ride the bitcoin roller coaster once the CBOE futures start trading," Ihor Dusaniwsky, S3's managing director of predictive analytics wrote in a client note. For context, the shorting method being analyzed by S3 involves the Grayscale Bitcoin Investment Trust, which is currently the only active exchange-traded fund whose performance is directly tied to the cryptocurrency's market price. But it may not be the only game in town for long, as ETFs backed by the Winklevoss twins and SolidX Partners may get a boost in their quest for regulatory approval once futures trading is live. Anyone investing in bitcoin will have to contend with a great deal of volatility. Since December 5, the digital coin's price surged from just below $12,000 a coin to more than $17,000 at its peak. And in between, the cryptocurrency experienced intraday swings that created and erased billions of dollars of value in a matter of minutes. Ultimately, if you think those rapid fluctuations will start being more pronounced to the downside, it's best to make your wagers now, before the price of transacting gets too steep. SEE ALSO: BlackRock's $1.7 trillion bond chief explains the key dynamic every investor needs to understand Join the conversation about this story » NOW WATCH: How to buy and sell bitcoin using one of the most popular cryptocurrency apps on the iPhone

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Nvidia is rising after announcing the 'most powerful GPU for the PC' (NVDA)

Nvidia is getting closer to offering a mainstream GPU based on its Volta architecture with the release of its new Titan V GPU. The card costs $2,999 and is aimed at artificial intelligence researchers.  Track Nvidia's live stock price here. Nvidia has finally brought its Volta architecture to the PC in a consumer format with its new Titan V GPU. The company is trading 0.97% higher at $193.74 after announcing the new chip, which goes on sale immediately for the out-there price of $2,999. The new chip is based on Nvidia's Volta architecture, which is slowly replacing its previous Pascal architecture that is still widely available today. The Titan V is aimed at scientists and researchers in the artificial intelligence field. The chip is about nine times more powerful than its predecessor, according to Nvidia. The new card illustrates Nvidia's focus on powering the next generation of artificial intelligence and machine learning, as the company is focusing on addressing the needs of researchers before releasing a card for the video gaming market. '“Our vision for Volta was to push the outer limits of high performance computing and AI," Jensen Huang, CEO of Nvidia, said in a news release. "We broke new ground with its new processor architecture, instructions, numerical formats, memory architecture and processor links.” The new cards are available for purchase from Nvidia, but they are being used in data centers for researchers to use via the cloud. Nvidia said it will begin offering access to the new Titan V card on its own computing platform immediately. The Titan V is not aimed at gamers or cryptocurrency miners, two of Nvidia's largest markets. Those markets have been supply-constrained as cryptocurrency miners are scooping up cards aimed at video gamers to help speed up their crypto rigs.  Read more about the interplay of Nvidia and cryptocurrency miners. SEE ALSO: MIZUHO: AMD and Nvidia's crypto boom is officially over Join the conversation about this story » NOW WATCH: One market expert says the financial system could collapse at any moment

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An app for buying and selling bitcoin has rocketed to the top of the iPhone App Store charts (AAPL)

The price of bitcoin is soaring. Coinbase, one of the services that makes it easy to buy and sell bitcoin, is soaring too – it's now the no. 2 app on Apple's iPhone App Store.   Bitcoin has had a volatile ride over the past week, with prices for a single coin skyrocketing to as much as $19,500 per coin at one point. The cryptocurrency's wild ride is also boosting apps and services that enable people to buy and sell bitcoins. Coinbase, one of the most user-friendly Bitcoin services, shot up to the top spot on Apple's App Store's most-downloaded free app chart on Thursday. But like Bitcoin's price, the App Store charts can be volatile, and it dropped to the no. 2 spot on Friday. Coinbase was also a trending download, according to the App Store search page.  That's a meteoric rise for an app that was the no. 216 free app in the United States only a month ago, according to App Annie data.  The influx of new downloaders may be one reason that Coinbase has had trouble keeping its service working properly over the past few days — it could simply be deluged by new users. Coinbase said users had trouble logging in because of record-high traffic.  After all, bitcoin's rapidly spiking price is causing a bit of a mania, with lots of first-time investors seeing the large price swings and seeing a chance to play the cryptocurrency market.  Here's our guide to how to buy Bitcoin on Coinbase.  Join the conversation about this story » NOW WATCH: Amazon has an oddly efficient way of storing stuff in its warehouses

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The market and the Fed are not in sync right now

In the Fidelity Insight of the week, Business Insider executive editor Sara Silverstein speaks to Ford O'Neil, a fixed-income fund manager at the firm. He says that the markets and the Fed are in agreement for this year, but have diverging outlooks for 2018, with the Fed signaling more rate hikes than the market expects. O'Neil says he sides with the Fed, citing synchronous global growth that could boost inflation. He says that there will be more pressure on the front end of the yield curve if there are three hikes. In particular, O'Neil thinks that there will be wage pressures next year as unemployment falls below 4%, which will push inflation higher.Join the conversation about this story »

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Gary Cohn on bitcoin: \_()_/

Gary Cohn, Trump's top economic adviser, was asked about bitcoin in an interview on Friday. He simply shrugged. Cohn also addressed outstanding concerns around the Republican tax reform bill. Gary Cohn isn't quite sure what to make of bitcoin. CNBC's Jim Cramer on Friday asked the National Economic Council director and adviser to President Donald Trump for opinion on the cryptocurrency that has recently seen its price skyrocket. In response, Cohn simply shrugged. He told Cramer, "I'm going to leave that to you. You're the expert today." In an interview later on Bloomberg TV, Cohn said the Trump administration is keeping an eye on bitcoin and its "evolving market." But he said the recent surge in price was not a significant economic threat. Bitcoin has experienced a week of wild gains, surging in value by more than $5,000 a coin. Its price fell sharply on Friday, diving below $15,000. In a press briefing last week, White House press secretary Sarah Huckabee Sanders said bitcoin was something that Tom Bossert, the president's homeland security adviser, was keeping an eye on. "I know this is something that is being monitored by our team here," she said. Watch Cohn's reaction to the bitcoin question: Gary Cohn on Bitcoin: ¯\_(?)_/¯(literally) pic.twitter.com/KYMgqUuZWU — Steve Kopack (@SteveKopack) December 8, 2017 In addition to his comments on bitcoin, Cohn said the Republican tax reform bill is also in the process of evolving. The bill, Tax Cuts and Jobs Act, is heading to a conference committee to resolve differences between the House and Senate versions. Cohn told both CNBC and Bloomberg that the conference would address the state and local tax (SALT) deduction. The SALT deduction is taken primarily in a handful of high-tax states like California, New York, and New Jersey. Republican lawmakers from those states are concerned about a compromise that would allow people to continue to deduct up to $10,000 in property taxes — but not state and local income or sales tax. Cohn said the White House is open to a compromise that would allow people to deduct either $10,000 in propoerty taxes or income taxes. "There are 70 members of the House from SALT states, they have to have a solution that allows their residents to come away from this in a position, that allows those members to support those issues," Cohn said.SEE ALSO: Republicans are about to confront Trump's 'red line' to fix problems in their tax bill Join the conversation about this story » NOW WATCH: Fox News' Tucker Carlson — a registered Democrat — explains why he always votes for the most corrupt mayoral candidate

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STOCKS RISE: Heres what you need to know

Stocks finished in the green on Thursday as bitcoin topped $16,000 for the first time after a wild 48-hour surge that saw fortunes made and exchanges crash. Some Wall Street banks are walking away from the volatile cryptocurrency despite a new futures market set to launch this weekend. Here’s the scoreboard: S&P 500: 2,637.01 (+0.29%) Dow: 24,200.60 (+0.25%) Nasdaq: 6,812.84 (+0.54%) Oil: $56.61 (+1.16%) 10-year treasury bond: 2.34% (-0.57%) As the GOP tax plan heads to conference, rich homeowners in blue states could be among the biggest losers. Here are the 12 companies that could pay the highest effective tax rates under the new plan. Lululemon surged after beating on earnings and raising its guidance. Cryptocurrency volumes went bananas today, totaling more than half of a usual trading day on the New York Stock Exchange. In other news… Bank of America has come up with the 'ultimate tax reform trade' that everyone is missing Pretty much every major cryptocurrency that isn’t called bitcoin fell A new Federal Reserve nominee could be key to setting rates — but his views make him a wildcard The tax bill could also add billions to the bottom lines of Amazon, Facebook, and Google’s balance sheets Join the conversation about this story » NOW WATCH: How to buy and sell bitcoin using one of the most popular cryptocurrency apps on the iPhone

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The Feds just asked a huge healthcare company who their real clients are and the answer is totally unsatisfying

The SEC forced pharmacy benefit manager Express Scripts to break out a seemingly benign number from its balance sheet. It has to do with the rebates it collects from pharmaceutical firms. Experts say it's weird that the company wasn't breaking this out before. The number does, however, speak to a lot of concerns people have about PBMs in general, and who they're actually serving — their clients or big pharma. The SEC has been trying to get to the bottom of a very important question for Express Scripts, the country's biggest pharmacy benefits manager (PBM). The question is: Who are your clients? Ideally, in Express Scripts' business, the client is ultimately you — or whoever pays for your health insurance. The company manages lists called formularies that determine what your insurer will and will not pay for. It's like a gatekeeper, and it's the biggest gatekeeper in the country. It, along with PBMs run by CVS and UnitedHealth control 80% of all covered lives in the US. It is paid by insurers and employers to do this, and the point is to keep costs down — to get you the best medication as cheaply as possible and take on the complicated process of choosing what drugs are worth paying for. Part of how PBMs do this is by setting up rebates with drug companies. The PBM keeps a portion of it, and passes the rest on to you. But all of the details of that are top secret. That is to say, why you pay the price you pay is all a black box. Some people are starting to have a problem with that.  Over the last year or so Washington has been wondering if enough of those rebates are actually being passed along to you. It's also wondering if those rebates incentivize PBMs to choose expensive drugs that have higher rebates.  Back in June, for example, Senator Bill Cassidy (R-LA) asked experts on a drug pricing panel if rebates "are actually a benefit to our society" since because of them "you may be paying more because you're on insurance than you would without it." There's also concern that rebates are blocking out the competition. In a recent presentation, the Federal Trade Commission highlighted a lawsuit between Sanofi and Mylan (yes, of EpiPen price gouging fame). Sanofi sued Mylan for offering PBMs and others such fat rebates that it couldn't sell its EpiPen competitor, Auvi-Q.It's not just the government that's bothered by all this. In fact, Express Scripts' biggest customer, Anthem Insurance, just dropped it citing sky-high prices for drugs and operational failures. What makes a client? And a few months ago, the SEC asked Express Scripts why it wasn't breaking out the rebate money it was getting from pharmaceutical firms on its balance sheet. All of the letters were made public, and you can read them here. Instead of breaking it out, Express Scripts was just lumping its receivables from pharmaceuticals firms in with receivables from its clients. The SEC wasn't having that. From a letter on October 12, 2017 [emphasis ours]: Rule 5-02.3 of Regulation S-X requires separate disclosure of receivables from customers (trade) and others. It is unclear why you believe accounts receivable from pharmaceutical manufacturers are a component of customer receivables considering that pharmaceutical manufacturers do not appear to be your customer. Please revise your disclosure to separately state accounts receivable from pharmaceutical manufacturers or further explain why you do not believe this is required. The numbers Express Scripts ended up disclosing are no small thing. At the end of last December pharma receivables — that is, payments due to the company — were $2.2 billion, out of a total $7 billion. By the end of September 2017, pharma receivables were $2.5 billion out of $6.8 billion in total receivables. We should note that Express Scripts asked for its exchange with the SEC to be made confidential.  Ed Ketz, an accounting professor at Penn State, thought that was odd. He thought it was even odder that Express Scripps wouldn't disclose its gross rebate receivables. "I'm amazed that they would balk at this. Just make the disclosure and be done with it... They must have thought this was really important." he told me.So what to make of the disclosure?  "I think at 40% [of receivables] we can start thinking of the pharmaceutical companies as customers. They're not just bystanders in this equation," he said.  Either way, Ketz told me, disclosing gross rebate receivables would give investors a better understanding of Express Scripts' business. "It would clearly be better for investors if we had a better picture of the amounts of rebates." Why so secret? As it stands now, it's basically impossible to know how much Express Scripts is making from rebates. The company told me that "the bulk" of what it collects from pharma is in rebates, though it does sell some services to drug manufacturers. It's also impossible to figure out how much of its rebates get passed along to customers. The company claims that it hands 89% of rebates back to customers, but there are a couple of reasons why that's hard to figure out from its financial statements, or if you're a customer. As the SEC noted in its letters, Express Scripts gives clients qualitative reasons for its pricing, instead of quantitatively showing clients how rebates lower costs. The company says that quantifying rebates "would be misleading to investors because it is only one of several measures of pricing in any given contract."  We don't know, as Professor Ketz pointed out, how much Express Scripts is collecting in gross rebates. Its insistence on secrecy made him "mostly confused." We don't know how much non-rebate revenue Express Scripts is getting from pharma. If it's a significant amount, that tilts the incentive structure in this business toward pleasing pharma. And that's probably a big conflict for the insurers who pay it huge sums to help them manage costs.  Express Scripts said that its clients can audit the company at any time. But that's arduous, expensive process for many businesses. Either way, that's very far removed from what's really worrying Americans — rising healthcare costs gobbling up more and more of their paychecks.  If it feels like that money is just falling into a black hole, that's because it is.SEE ALSO: The big loser in the CVS-Aetna deal already seems pretty clear Join the conversation about this story » NOW WATCH: Here’s why your jeans have that tiny front pocket

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Goldman Sachs will clear bitcoin futures for some of its clients

Goldman Sachs will clear bitcoin trading for some clients on a case-by-case basis, according to a person familiar with the plans. The derivatives contracts are set to go live on the Cboe Futures Exchange on Sunday.  Goldman CEO Lloyd Blankfein said last week that bitcoin "doesn't feel like a store of value" or a currency. Bitcoin is up more than 1,500% this year.    Goldman Sachs will clear bitcoin futures trading for some of its clients, according to a person familiar with the plans. The derivatives, which allow traders to bet on the cryptocurrency's price without buying the underlying asset, will be offered by the Cboe Futures Exchange from Sunday. The CME Group will launch its own version of the product later in December.  Goldman is still exploring whether to play a role in other aspects of cryptocurrencies such as market making, the person said. Goldman will decide who gets to trade bitcoin futures on a case-by-case basis, the person said.  Goldman CEO Lloyd Blankfein said last week that it was too early for the firm to have a bitcoin strategy. "Something that moves up and down 20 percent in a day doesn’t feel like a currency, doesn’t feel like a store of value,” Blankfein told Bloomberg TV. The Wall Street Journal earlier reported on Goldman's plans, adding that Bank of America Merrill Lynch, Citigroup, and the Royal Bank of Canada are telling customers that they won't have access when futures trading goes live.   Bitcoin has had a wild year, culminating in its biggest thousand-dollar moves ever this week based on round numbers. It gained over $4,000 over the past two days, and rose above $16,000 per dollar on Thursday. SEE ALSO: Bitcoin tops $16,000 after wild 48-hour surge Join the conversation about this story » NOW WATCH: The stock market is flashing warning signs

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Cboe's bitcoin futures market goes live Sunday but some of Wall Street's biggest banks are sitting it out

  Bitcoin blew past $16,000 a coin Thursday, but Wall Street banks don't appear too eager to get in on the crypto-mania.  The Wall Street Journal found Bank of America Merrill Lynch and Citigroup won't provide their clients access to Cboe's bitcoin futures market.  Cboe, the options and derivatives exchange based in Chicago, is launching its market for bitcoin futures Sunday. Cboe Global Markets' bitcoin futures market will go live Sunday, but some Wall Street banks don't plan to get involved, according to a report by The Wall Street Journal.  The futures market, which Cboe has been planning for more than six months, will allow investors to bet on the future price of bitcoin. Investors in the market won't have to actually touch the red-hot coin, known for its spine-tingling volatility.  Still, that doesn't appear to have mollified the anxieties of Bank of America Merrill Lynch and Citigroup. The two firms will not offer clients access to Cboe's bitcoin futures market on Sunday, according to the Journal, citing people familiar with the matter. Meanwhile, Morgan Stanley and Societe Generale, a French bank, are still considering entering the market for their clients.  A spokesperson for Cboe declined to tell The Journal which banks were participating in the market on Sunday.  Banks have had a less favorable view of cryptocurrencies than Wall Street exchanges. JPMorgan CEO Jamie Dimon famously called bitcoin a "fraud." Goldman Sachs CEO Lloyd Blankfein said in November his firm was in no rush to develop a strategy on bitcoin, according to a Bloomberg News report.  Still, bitcoin blew past $16,000 a coin on Thursday, according to data from Markets Insider.  Read the full report at The Wall Street Journal >> SEE ALSO: Cboe is racing to launch bitcoin futures trading ahead of rival CME Join the conversation about this story » NOW WATCH: Cryptocurrency is the next step in the digitization of everything — 'It’s sort of inevitable'

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GOLDMAN SACHS: Tax reform won't help the economy much at all

Business Insider executive editor Sara Silverstein talks about the effect of tax reform on economy. She cites a recent Goldman Sachs report, which says the benefit for corporations will be small, and that the effective corporate tax rate will only drop by a few percentage points. Silverstein also conveys Goldman's point about how tech stocks may see less of a positive impact than previously expected. Join the conversation about this story »

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Republicans are about to confront Trump's 'red line' to fix problems in their tax bill

The GOP tax bill is headed to a conference committee, wherein members will have to work out differences between the House and Senate versions of the plan. One change being floated: cutting the corporate tax rate to 22% from the current 35%, instead of the 20% proposed in the original version of the bill. Such a tweak would help free up money to solve problems that cropped up after the bill passed, but also could open the door to more intraparty bickering. Republicans, moving closer to passing a massive overhaul of the US tax code, are heading toward a possible fight over corporate taxes as they work to finalize their legislation. The House and Senate this week approved measures to send the Tax Cuts and Jobs Act (TCJA) to a conference committee, in which members from both chambers will try to hash out a compromise version of the two bills. One of the most significant potential sticking points has begun to emerge: what the final corporate tax rate should be. According to reports, Republicans are open to cutting the rate to 22% from the current rate of 35%, instead of the 20% proposed in both versions of their legislation. That would raise more revenue to help correct some unpopular provisions in the bills that were passed. Also, it could help enable tweaks to items like the state and local tax deduction, which the House and Senate bills proposed to largely eliminate. President Donald Trump suggested over the weekend that he would be open to the slightly higher rate after previously calling the 20% level a red line. Fitting it all into a tight budget window Republicans must balance fixing errors in their original bills and adjusting deductions with the requirement that the bill only adds $1.5 trillion to the federal deficit over 10 years. Both the House and Senate versions of the TCJA came in just barely under that limit, so any major changes to make provisions more generous would likely need to be offset by increased rates or another revenue-raising change. But raising revenue from a less generous corporate rate cut would also give the committee room to make changes to other provisions, which could reopen the fight for different pet projects. For instance, Sen. Marco Rubio told Politico that if the corporate rate was increased, then the child tax credit should be more generous — or he would "have a big problem." Rubio pushed for an amendment to do just that when the TCJA was being discussed in the Senate. Lobbyists could see the corporate rate increase as a way to win a benefit or carve out for their industry — similar to the ones proposed for craft brewers and fish processing plants. While an increased corporate rate could be the biggest shift in the conference committee, there are still a slew of issues that need to be worked out from the elimination of the medical expense deduction to the tax break for pass-through businesses. Chris Kreuger, an analyst at Cowen Washington Research Group, said the discrepancies will likely take some time to work out, but they shouldn't put the brakes on getting a bill to Trump's desk by Christmas. "We expect the Conference Committee to conclude by the end of next week (December 15), though it is possible it could go to December 22," Kreuger said in a note to clients. Both the House and Senate Republicans named their members of the conference committee soon after the motion to take the bill to conference passed. Democrats have also made their selections, most notably including Sen. Bernie Sanders, an independent from Vermont and former Democratic presidential candidate. Here's a list of the Republican members of the conference committee: House: Ways and Means Chairman Kevin Brady (Texas) Reps. Devin Nunes (California) Peter Roskam (Illinois) Diane Black (Tennessee) Kristi Noem (South Dakota) Rob Bishop (Utah) Don Young (Alaska) Greg Walden (Oregon) John Shimkus (Illinois) Senate: Finance Committee Chair Orrin Hatch (Utah) Budget Committee Mike Enzi (Wyoming) Energy and Natural Resources Committee Chair Lisa Murkowski (Alaska) John Cornyn (Texas) John Thune (South Dakota) Rob Portman (Ohio) Tim Scott (South Carolina) Pat Toomey (Pennsylvania) SEE ALSO: Experts are starting to find massive errors in the GOP tax bill after it went through Congress at lightning speed Join the conversation about this story » NOW WATCH: The 4 best memes from Trump's trip to Asia

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Congress narrowly avoids government shutdown, delays deadline 2 weeks

Congress passed a bill to extend government funding for two weeks, extending the fight over a government shutdown. The bill will move the shutdown deadline back two weeks — from Friday night to December 22. The bill made it through the House on a close vote and was almost immediately passed by the Senate. Congress voted Thursday to pass a bill that would extend government funding by two weeks, avoiding a partial government shutdown on Friday pending signature by the president. The bill passed the House by a vote of 235 to 193. Fourteen Democrats voted for the measure backed by the GOP leadership and 18 Republicans defecting from their party. The bill would extend government funding through December 22. The bill was then taken up by the Senate less than an hour later and passed handily, with many Democrats supporting the bill. There was some concern that it could fail in the House after members of the hardline conservative House Freedom Caucus made demands for the spending bill, including extending the short-term deadline to December 30 and increased defense spending. Leaders of the Freedom Caucus met with House Speaker Paul Ryan repeatedly over the past three days to come to an agreement. Rep. Mark Meadows, the chair of the Freedom Caucus, ended up voting for the bill along with many of the members. This sets up the real shutdown fight will begins as each party will attempt to include legislative priorities in the next funding bill. Democrats are pushing for a codification of the Deferred Action for Childhood Arrivals (DACA) immigrant program and an Obamacare stabilization measure. Republicans want to include funding for border security and a large increase in military spending.  Leaders from both parties met with President Donald Trump on Thursday to start these negotiations after a similar meeting was canceled last week. Previously, Democratic leaders Chuck Schumer and Nancy Pelosi backed out due to a tweet from Trump attacking the pair for their shutdown bill requests. SEE ALSO: The GOP tax bill just got another ugly review Join the conversation about this story » NOW WATCH: 'It was bulls---': Megyn Kelly responds to being called Trump's 'chew toy'

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Google and Facebook dominate digital advertising and they now account for 25% of all ad sales, online or off (GOOGL, FB, TWTR, SNAP)

The world of advertising à la Mad Men is no more. Consumers' eyes are drifting from newspapers and televisions to computers and smartphones, and the world's global advertising dollars are following them. But the overwhelming beneficiaries of this monumental shift are Google and Facebook. The two companies just by themselves already draw in more than half of all online advertising revenue worldwide, as we can see in this chart from Statista. And now, they're starting to account for a significant chunk of all ad sales — online or off. Google and Facebook's dominance has affected not only older, traditional media companies, but also newer digital ones. Even companies with popular services such as Snap and Twitter are struggling to keep hold of their pieces of the advertising pie. SEE ALSO: The amount of money flowing through Venmo has surged — at least before the launch of Apple's rival service Join the conversation about this story » NOW WATCH: This animation shows how terrifyingly powerful nuclear weapons have become

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The GOP tax bill could add billions to Amazon, Facebook and Googles bottom lines

Cowen estimates that Amazon, Google and Facebook will save a combined $4.5 billion on taxes in 2018 thanks to the GOP tax bill. They should also benefit from the bill's capex expensing provision. The GOP tax bill has long been expected to boost corporate profits. Now we know just how much the biggest tech companies in the US stand to save — and what that could mean for their bottom lines. Google will save $2.28 billion in 2018, while Facebook will see $1.56 billion in savings and Amazon will enjoy a $723 million break, according to estimates from Cowen senior research analyst John Blackledge. The firm forecasts those savings will translate to big earnings-per-share (EPS) boosts for each company, with Amazon the big winner, boasting an expected upside of 24%. Google and Facebook will both get an EPS bump of 8%, Cowen said. For context, the Cowen's analysis is based on three assumptions: (1) the US corporate tax rate goes to 22% from 35% on January 1, 2018, (2) there are no changes to international taxes, and (3) there's no impact from other aspects of the tax bill. But the good news for the mega-cap tech triumvirate doesn't end there. Cowen sees Google, Facebook and Amazon also benefiting from the proposed capital expenditure expensing provision in the GOP tax bill. The firm estimates that the companies will spend a combined $234 billion on capex from 2018 to 2022, noting that Facebook has said it plans to double reinvestment in 2018. So there you have it — three of the hottest tech firms in the US look poised to keep adding to their dominance, all thanks to the GOP tax bill. Bet against them at your own peril.SEE ALSO: GOLDMAN SACHS: Here's how to make a killing on the 7 top trades of 2018 Join the conversation about this story » NOW WATCH: One market expert says the financial system could collapse at any moment

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The next stock market crash will look a lot different than the financial crisis

The stock bull market is well into its ninth year, and signs of fragility have firms like Bank of America Merrill Lynch looking ahead to the next big crash. By BAML's calculation, the next bear market will be in line with past occurrences, and nowhere near as volatile as the 2008, 1998 or 1987 crashes. Stock bull markets don't last forever, which is why it's a useful exercise to start bracing for the next big crash. Or at the very least, it's helpful to know what kind of damage could result from the inevitable downturn. In order to do so, Bank of America Merrill Lynch looked at past S&P 500 bear markets — generally defined as a 20% drop — and analyzed the volatility that has accompanied them. To them, the key is looking at the degree of price swings leading up to the crash. And based on the fluctuations seen during the ongoing 8 1/2-year bull market, the firm forecasts volatility of 18% for the next large downturn, which is right in line with other "classic" bear markets. Of course, there's always the risk of a rare occurrence that rocks the market and sends measures of volatility spiking. BAML notes that the Great Depression of 1929 and the global financial crisis (GFC) in 2008 were driven by major systemic shocks, while Black Monday in 1987 and the collapse of hedge fund Long Term Capital Management in 1998 were caused by liquidity-driven meltdowns. Fear not, says BAML. For one, the market is not at risk of a GFC repeat. The firm says that the huge regulatory response to the crisis, bank deleveraging, and risk transfer to central banks have alleviated the pressures that contributed to that crash. As for the massive selloffs in 1987 and 1998, BAML argues that volatility at present time is simply too low to match the conditions that preceded those disastrous periods. "History shows that a shock of this magnitude has never occurred from the current level of volatility," a group of BAML derivatives strategists led by Benjamin Bowler wrote in a client note. But this doesn't mean it's time to get cocky. Just because the next bear market is likely to be subdued relative to the worst in history doesn't mean it won't be painful. After all, as BAML points out, "markets remain fragile." So as the current bull market extends well into its ninth year, investors would be well-served to keep an eye on the risks that are still out there, lurking in the shadows. Luckily, Morgan Stanley has identified "three x's" that could send stocks into bear market territory: extreme leverage build-up, exuberant sentiment and excessive policy tightening. Got all that? Good. Now go protect to the downside, just in case.SEE ALSO: A tug-of-war is raging over control of the stock market Join the conversation about this story » NOW WATCH: The stock market is flashing warning signs

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